Episode 126 Interview with David Friend President and CEO of Wasabi Technologies
Welcome. To the vine resources, podcast, show, with your host, david lawrence. Welcome, to another edition, of the vine resources, podcast, show well today i've got a really interesting guest he's, on the line from boston, hopefully from his home, uh got an amazing, business. Uh, recently, uh had a new series b investment rounds, over 30 million dollars, his name is david friend, and uh, he is the president and ceo, of wasabi, technology, david thanks for joining me. Yeah pleasure, nice to be here. David. You know, we just before we started, we talked about your your business. Uh. Hot cloud storage. It is hot it's a hot hot area, tell us. Tell us about your company tell us, a little bit more about wasabi technology please. Sure. So uh this is my sixth company if you can believe it uh the last one was a company called carbonite. That. Was a very successful, backup, company. Was sold, last year for 1.5. Billion. So we're cloud storage, experts. And, uh. We. We decided, to start wasabi, because. We. Knew that we could do a better job at cloud storage, than. Amazon. Microsoft, and google were doing, and. We came out with, uh, our, product which is uh nearly identical, to amazon, s3, cloud. Storage. Um, the only difference, is that we're one-fifth, the price and and faster. And we launched that product, in, um. May of 2017. Uh we've grown very rapidly, we've raised over 100 million in equity, today. We have, about 3 500. Msps. And vars, as resellers. We're primarily, a channel, oriented, company. And we have over 18, 000, customers, including some very big names. And, we're growing. Probably, 40, to 50 percent quarter over quarter so we're on a real. Rocket ship right now. Wow, what a what a story as well and uh not small change to be selling your previous company for, tell us, tell us though um you know you've you've obviously been in the game. For for a long time david you know, the ups and downs the good and the bad, what was it like back in 2015. When you said, or whoever said right, we're going to start this new company. How tell us tell us what the first. Three six 12 months was like, what tell us about that.
Well People take data storage pretty seriously. And, uh, you know so. Uh. You know in at the very beginning, there was like well who the heck is wasabi, and why should we trust you with our data. And i fully expected, that because when we started, carbonite. You know 10 years prior to that we heard the same thing you know. We were backing up people's computers, but they would say who the heck is carbonite, why should i trust you with all my data. And you know it takes several years to get past that people start to see that you're you're there for for good, and, you've got lots of other customers, that are using you and, you know eventually, people start to accept you as part of, the fabric, of the the sas world. So that's kind of where we are today, and, you know we're on this very fast exponential. Growth curve, and. Companies, that probably wouldn't have looked at us a, couple of years ago or even one year ago are now, coming back saying gee i can, i can take that hundred thousand dollar a month storage bill from amazon, and cut it to. By uh three quarters. And uh so you know the companies, that, came to us first are the ones for whom storage, costs, were, uh, you know painful. Uh, so this would include you know tv and movie studios. Surveillance. Uh, medical, records. You know where there's a lot of x-rays, and medical, imaging, and things like that. So those people would would look at us and they'd say wow you know for the difference in price, you know. Let's give these guys a try. And i think you know the first few years, a lot of what we got were second copies, of data somebody already had their data on in-house. On-prem, storage, or, in somebody else's, cloud microsoft. Or whatever and they said you know, if we're going to make a second copy of this data for backup, and security, reasons. Why not put that data in another vendor so we don't have all our eggs in one basket. But now, increasingly, we get the primary, data. And uh because we're hot storage, we're not archival, storage. Um, you know we're. Fast. And uh and inexpensive. And we've got very fast pipes going into our data centers. Increasingly, we're getting. What i'd call primary, data now. That's really interesting, so. You know was was that early first couple of months were you you know were you sitting around, the coffee table or the the office talking about your, strategy, for taking on the world how did that how did that go. Well it took us five months to sell our first petabyte, of storage. Interesting. Today we sell a petabyte, of storage, almost every day. So. You know it's, a big difference. And uh yeah i mean. You know, selling that first one i still have the little, one dollar bill that one of our customers, sells, payment for his. You know his first, couple of gigabytes, of storage.
Uh That's fanta, i love that. One and then you get another and you know the early customers, were tended to be very small. And. You know now we get customers, who are sending us petabytes. Many petabytes, of data. So it's uh you know we're kind of in a different place right now. You made a really good point about that's interesting, that and that secondary, data, so it's really you know getting that opportunity. Where, that, trust isn't built yet how do you, how have you built that trust uh because this is obviously a big challenge for organizations. And and security, and risk. For or for for data, being, being. Being hacked into. How do you build that trust, particularly in organizations. That are probably very corporate. Complex, organizations. What's that what's that like nowadays, what do you see as the challenges. Well i think you know the biggest concern, people have with with young companies, like wasabi, is you know are we going to go out of business, and take care of, them. That's a bigger concern, than. Just plain security, hacking and so forth because. You know we do this pretty much the same things that amazon, and microsoft, do in terms of, security. I mean all of that stuff is. Is pretty well known in the industry, how to, protect, the data. So. You know the the issue really is, uh. You know if you were looking at wasabi, saying why should i trust wasabi. You might want to. Look at the fact that we've raised a lot of money. That we have a management, team in place that's been through, you know five previous, successful, companies. Uh that we have uh 18, 000 customers. And. You know i mean at some point people look at the totality. Of your business, and they just say you know what these guys are clearly going to be around a while they know what they're doing. And of course we get lots, of, of. Great endorsements, from our customers, which we put into our marketing, materials, people telling us. How great our customer, support, is and how solid the product, is, and. All this sort of stuff and and so you know we mark it hard, and we spend a lot of money. On our brand. And you know we want to make sure that you know. When somebody thinks about gee i want to move my data to the cloud. That wasabi, is the first thing that pops into their head. And uh you know so that that's marketing, and we we we've spent quite a bit i believe in spending money on your brand. Um. Because that tells the world. Who we are, and what we stand for. What um where did the name come from how did that develop. Well. You know wasabi, is hot. And of course. Storage. We we looked at you know choosing a company, name is very important, and you know carbonite, was a great company name that worked out really well for us. Uh we probably looked at over 200. Different possible, names. And, uh, when we saw, wasabi. Some. One of these. Domain. In fact in the uk. Owned it, and was selling it uh we said that's that we have to have that name. And it was very expensive. It was very expensive, but you know we took a deep breath and and bought it anyway, because. It's one of the most important decisions, you can make. You know i like names, that um. When you hear it you can spell it there's a lot of company names out, have no, idea. How the heck dispel, it if you hear it. Um and i want a name that kind of sticks in your head and and has some association. With the product. Uh since you're in the uk you probably, know that there's a, a chain of, sort of down market sushi restaurants, called wasabi. Not a week goes by that we don't get an email from somebody, complaining, about the tuna, wasn't fresh, or something like that. I think, they have wasabi, dot co dot uk. By day. But, somebody's, mad because they didn't like the waiter, or. They didn't like the sushi. You know they just sent the email to. Wasabi.com.com. Well they they missed the chance to buy the dot com obviously, and uh you know that so that's another, i'm sure you could tell me some stories about domains, uh buying over the years. David tell me. Tell me this um, just bring us, up to date. Obviously, it's been a challenging period we you know we're not going to we're not we're obviously doing a podcast, here but you've given me the delights, of your, beautiful, view out of your, your house, um.
In Massachusetts. What tell me what it's been like during this covid, period, you know that the change in working environment. How it's impacted, your business your team, and and how you've adapted, to that environment, for the business. Well i think you know wasabi. Like most of the. Cloud, vendors, has benefited. From. From. You know every from the work at home. Change, because. People who were. Storing their data on-prem, in, emc. And netapp, and hp. Servers, and things like that. Found that it was pretty hard to take that infrastructure. And make it into a work-at-home, infrastructure. You know they had, they didn't have enough bandwidth. They didn't have enough. Vpn, licenses. It was complicated. And, so i think it accelerated. The migration, of data to the cloud which has benefited, us. Um. And you know we've had record week after record week after record week since. May, or since march when the whole thing started. Now as far as the company, goes you know we used to be, all together, in a, nice office building downtown, boston. And uh, you know one day we just closed the place down and everybody, went home. And uh. That's. Probably. That's, caused some challenges. You know the uh. It's hard to develop, that esprit, de corps. When, people are working at home and, in the last, six months we've probably added 30, new people to the company, who i've never met, you know i've, seen most of them on a zoom call but i've never met them. And to me as the ceo, i mean i i like to have a very collegial. Company, culture, where, you know. People can joke and talk to each other in the cafeteria. And, you know. Everybody gets together and, rings the bell when we have a big sale or something like that. I like that. But, uh. You know. It, almost, feels today, like like. We've got 100, consultants. Instead of 100, employees. I think we i you know i think this is going to be true of everybody, i think we're, to some extent we're burning through our social, capital. You know people are working hard, and they're they're, putting in the hours and progress, is getting made on all fronts and so forth. But there's just something, missing, about. You know i call it the wasabi. Team. And it's it's hard to have that same team spirit, when, you don't get to see people face to face you don't get to go out to lunch you don't get to have a beer after work. And all these sort of things that that make the workplace. An important. Part of your life you know i mean you go home and you've got your home life but. Your colleagues, are, you know very close. Uh and very influential, in your day-to-day, life. And uh you know you don't really get to see them so after a while i think. I think people will. Eventually, start to feel, kind of burned, out on the isolation. So i i'm certainly, starting to feel that personally. How do you how do you see that i mean these are some great insights there david i mean, i've talked to a lot of other. You know business owners about these challenges. And how do you see it playing out over the next 12 months. 12 to 18 months. How do you see it changing particularly if you're hiring. You know junior, people who who, need to be around other people. And you also need that yeah creativity. Spark. As you quite really said those sideline, conversations, outside of the work environment. But how do you see this progressing, if we're, we're kind of stuck in this loop for the next. Hopefully not 12 months but it could be. Yeah well you know i don't want to force anybody, to come back to work until they're comfortable. Um. But you know you mentioned the younger employees, and and you know the the people who are complaining, the most are the young sales people. Who, a lot of whom are sharing an apartment, with somebody else and and it's just, it's. It's hard to concentrate, when your roommate, is in the living room playing video games, or you know listening to music, or something like that and.
I Think that's that's a little stressful, so they're they're very anxious, to get back to work and i think as the office, opens. Reopens, it'll open slowly, you know and the people who. Live nearby. Who really want to be in the office, who who. Just, want to get out of their apartments. And be able to concentrate. I think we'll be the first to come back, and. Luckily, we don't have, one of these open office environments, we've got you know a. Space that we're in was vacated, by a law firm and so there are lots of small private offices. And so i think this will make it very easy for us to to allow, you know some percentage, of the workforce, to come back in. To the extent that they want to, now you know having said that, we've always had. Most of the employees. Working from home at least part of the time. And, particularly. The engineers. Some of them live an hour from boston. I'd rather have them. And they're all mature. You know i'd rather have them sitting at home. Working, rather than spending two hours a day, you know sitting in traffic. And. So. Typically. In the past everybody's, come in at least one day a week. Just so that every people have a chance to interact, personally. But i've never been really big on having everybody, come into the office every single day you know if you've got people who live. An hour or more away. That's, it's sort of a waste of time, when you think about it. So i think what will happen is you know some of the young sales people will start to come into the office on a regular, basis. And then we'll start to have. You know small groups work groups uh you know like sales people, and and marketing, teams, and things like that. We'll, alternate. You know different days of the week start coming in so that, all the sales people are in one day all the marketing folks are in another day all the devops, people are in another day and that sort of thing. You've david you've obviously, you know been hugely, successful, in your career. Um. You could easily i'm sure retire, on the golf course now and probably lead a, nice life i'm curious what's driving, you what keeps you motivated, to get out of bed every day and run a massively, growing company. What's the bits that keep you going every day and get you out of bed. Well i really enjoy the process, you know i mean uh. In college, i studied music composition. And you know i quickly realized, i was never going to be able to survive, doing that. But i like the process, of starting with a blank sheet of paper. And then you start to fill in the notes so to speak and when you're done you have a composition. And starting a company from scratch, is a lot the same, i mean you know when we started wasabi, it was just me and jeff flowers, my. Longtime, co-founder. Sitting around, his kitchen, table. You know. Shooting the. You know. And, trying to figure out what it was how, how we wanted to bring this to market, and. You know i would do market research, while he was writing code and and uh and that sort of thing and, now you see. You know. Wasabi, all over the place you know it gets written up all the time it's, it's, acknowledged, as being one of the hot companies, in boston. And uh you know everybody wants to be part of it now so it's uh. You know, we started with nothing and now three years or four years later. We've got something which is making an impact. On the world, and. I like these, um. You know the sort of disruptive. Pricing. Kinds of businesses. Because. Some of my previous, companies. You build the product, and then you find out nobody really cares. Well you know everybody, needs storage. And if you can do storage, for, a fraction, of the price of what's out there in the market today. It's like somebody who discovers, how to make sheets. Sheet steal for for 20. Less you know it. Storage, is storage, and why would you pay more, you know when the stuff you can get for less is just as good or better. And uh, so. I like this it you know a lot of people think storage is boring business, but. It, underlies, almost everything that we do you know there isn't a company, on the face of the earth that doesn't store some data. And so everybody, is a prospect. For this, and over the next decade. You know most of the world's data is going to migrate, to the cloud. It's just starting, really now even though there's a lot already, in, amazon, and google and so forth.
But When the dust settles i'd like as much of the world's data to be stored in wasabi, as possible. So. That's a really. Great challenge. And you know when. When i. Am finished with wasabi. Either because it goes public and somebody else becomes the ceo, or. Somebody comes along, oracle, or, microsoft. Or somebody and buys it for a lot of money. Um you know we'll have something to look back on and say gee we really. We really changed the industry, we changed the way people thought about, storing, data we. Changed people's, view from being wow data storing data is expensive, and we have to be careful, to. Storing data, is like the least of our problems, it's so cheap. You know let's keep everything forever. So. We can if we can achieve that it'll be really fun to look back at it and. And see what we did you know. What are you what you know. With with the. Experience, of covid, and the challenges, that we've been through the last six months odd. What what's the reflection, points that you've taken away from it that you've come out as the positives, how have you, have you thought about, your life and, and your business and your team and what's the what's the real things that have added value that you think that you would, you're not going to change, or you're going to keep now. Well. You know people always ask me you know how can you possibly, compete with amazon, microsoft. And google, and. You know some of the investors, that i talked to early on when i told them what we were doing. They looked at me like i had two heads. But, truth the matter is no matter how big you are you can't be best at everything. And. We decided, to take the resources, that we have and just be best at storage, and stick to our knitting. So the key here really is to stay very focused. And, just do that one job really really well. Luckily, that you know, storage, is such a big, a big, uh market, that you know. We can be a giant company, and still only have a very small percentage, of the stored data in the world, yeah i was just reading an idc, report. That said. The amount of cloud. Storage. From microsoft, google and amazon. Went up, 75. Exabytes. Just in the last quarter. So. We don't even make a rounding error. At this point, you know in the total amount of storage. So it's crazy, it's crazy. Yes. What tell me this um. If you were giving, one person, a piece of advice about, managing. Tremendous, change in their business. What's that what would you what would you say to them. Well. You know in terms of doing my job, the ceo's, job. I i have this. View of. Uh how, management, ought to work which is a little different, i think from from the sort of classical, view. You know most people think of an organization. As a pyramid, with the ceo, at the top. And, i've always, worked on the principle, of having that pyramid, be upside, down with me at the bottom. Because the real work gets done on that big flat side of the pyramid, you know where the engineers. The sales people. The marketing, people, and and, and all that sort of thing and and my job is really just to create, an environment.
In Which all those people can really flourish. So that means, you know i they need enough, we need to have funding, so that people can get paid they need a nice office to come to. Uh they need a work environment, that isn't hostile, and. Has, you know. People in it that makes you not want to come into the office. And that sort of thing so, that's. That's the way i, i tend to manage. And, um you know i i like to see that the real work, gets done. You know by. The individual, contributors. And the higher up you go in in the hierarchy, the organization. You know the, the less, i think you're contributing. On a day-to-day, basis, but the more you're creating, an environment, in which the people under you. Or over you in my view of things. Can flourish and get their get their work done and be creative. In terms of where the the future is going, and the direction, what's, what's exciting, you in in the industry. And where do you see the next few years. Going within the within the cloud storage market. So. You know, um. The amount of data being stored, in the world, is. Growing, so fast. Um. You know genomic, data for example, is doubling, every seven months. Surveillance. Data is growing, by, you know probably somewhere, between 30 and 50 percent, year over year. Every time you turn around, cameras, are higher resolution. You know there are more of them there's. 350. Million, surveillance, cameras in operation, in public spaces, around the world today. You know everything, is producing, more data just the camera in your phone has gone from 2 mega, megapixels. To 8 megapixels. To 12 megapixels. And now 5g, is coming along, and that's going to give. Probably a thousand, times the amount of bandwidth. That people have had, and. You know you don't create, bandwidth, without somebody coming along and figuring out a way to use it, so. That bandwidth, is going to start. You know. Talking to your thermostat. To your tesla, to, you know, everything. And there's going to be you know that's just going to unleash an additional, flood of data. And all of this needs to be stored, somewhere, and all the great advances, that are going on in ai, and machine, learning, and so forth. All depend on having large data sets to work with. You know yesterday, i was talking to a doctor at mass general, who's involved, in. Using, ai, to detect, breast cancer. And they now have ais, that are better than human. Radiologists. In in detecting, breast cancer. But the way they did that, was by training. The ais. On a huge, volume. Of. Uh. Of x-rays. Going back 20 years. And you know if you didn't have that data you couldn't make that advance, so people are now. Taking a new look at data and they're saying. Wow instead of throwing that data away because it's costing, me x dollars a month to store it, i better keep it because next year. Somebody's, going to have an algorithm. That, you know is going to produce, enormous, value if i. If i keep this data, if i don't have the data, you know i may not be able to use it. So. I think we're unleashing. You know by, by changing the mindset, of. Storing data from being one of wow it's expensive, and we better limit how much we store.
To An abundance. Mindset. Where we say wow data's so cheap who cares what it how much we store, let's keep everything, because. Tomorrow, we discover, a really, important, use for it. Um, you know that's uh that. That that's, what we're participating. In by by having this really disruptive. Price. You know it's not like we're 10. Cheaper than, amazon, we're one-fifth, the price. Of amazon, so it's almost, an order of magnitude. Um. You know in terms of the reduction, in cost. If i was, david. If i was selling to um or what, sorry i'll put that another way probably, if i, what what's what's it like to be selling to let's say an att. What's the difference between selling to an att. Or going and talking to. The state of new york, the city of new york city who want to surveil. Their their, the whole city and put that in the storage. What are what are the differences, between, selling to, a public, and private company and what's important to them in their, in that in their in their cloud, storage, solutions. Well, we don't have, a t, but we do have ntt. Which is the biggest carrier, in japan. Yeah as the partner, and, um. You know they. Uh, they run us, data centers, for, you know a pretty high percentage, of the of the largest, companies, in japan. And uh every time one of their customers, packs up and moves to amazon, they've lost that customer, forever. And so, you know a few years back they decided, to fight back, and they have now, got the ntt. Cloud. Which is directly competitive, with amazon. And, instead of developing. All of the components, they went out and partnered, with what they thought were the best of breed partners. In every area so you know compute. Storage. Ai. Facial recognition. Voice recognition. So forth and so on. And they picked us, as the storage, partner, so we are the storage, part of the ntt, cloud. It's a long, sales process. Yeah i can tell you how many meetings, we had. You know i lost track. But oh it took, you know they looked at every vendor in the world on my, i imagine. And, uh. You know teams, of engineers, coming over to boston. Uh, many many conference, calls. So that's a big process, but you know in the end. If you get a, customer, like that, um. You know. It's it's a big deal, right it'll produce. Millions, and millions of dollars worth of business, over time. On the other hand, of the 18, 000, customers, we have there's probably, a hundred, that are kind of like that you know that are really big deals. And then there are, lots, that. Come to our website. Put their credit card in and buy, you know a few terabytes, of storage. And. You know at our prices, i mean a terabyte, of storage, is six dollars, a month. Uh we can't even, afford, to talk to them you know if they call up with and and have one, question to customer support we've probably lost money. On that customer for the next five years. So. Uh. You know so it really it covers the whole gamut, and, it's a bit of a challenge. Running a business, or structuring, a business, where. The. Largest customer, to the smallest, customer might have a a. A ratio, of four or five orders of. Magnitude.
Very Interesting can you imagine doing that ntt, deal, uh during covid, all over, all over zoom or skype. Well it would have been harder, actually i probably would have been better. There because, there were, a lot of trips to japan, and there were a lot of trips from japan over here and i'm sure those guys would much rather have stayed home. Rather than. Flights. You know. But. Yeah i mean i think it could have been done. It's surprising. When when you can't go in person, it's surprising. How much you can really get done. With conference, calls. It's. We're in this mindset, of the the face-to-face. Meeting is sort of obligatory. Part of doing business. It's almost like. You must suffer if you want my business. But but on the upside a bit like that creativity. Side, i'm sure there was new alliances, and friendships, made, in person that you just can't do over zoom, or, or teams or whatever. Uh that, that's always the challenge. David tell me this from your childhood, you know, you. What what was you can you have you got a story from your early childhood that, really set your work ethic up for for for your life. Is there anything you could share with us. Um. I don't know about work ethic, but, um you know i was always. Uh. Always in trouble. As a kid, because. I was always blowing, something, up or setting something on fire. And uh. But you know not in a malicious, way but just, because i was always trying to do things that were way beyond my capabilities. So i you know, my poor parents, you know had. Had to deal with this um. You know. Always one thing or another i had a basement laboratory. And you know. Was doing things that were. Dangerous. Uh, all the time and they had no idea what i was doing down there but. Then there would be an emergency. You know somebody would race down with a fire extinguisher. But, uh. You know. I never really, had a desire, to work for anybody, else i always. You know when i was in grad school. I. Had a part-time, job working for rca, which was a big company, and they were, actually, paying to put me through grad school. But uh, you know when i when i thought about it i i shared a lab with some guys who'd been there 20 years. And, the idea, of sort of, knowing where i was going to be in 20 years. Just didn't sit right with me. And, uh. So, you know when i had the opportunity. To sort of go off and start my first business. I did it immediately. Some people are just wired that way you know there are other people it just turns them into a nervous, wreck. But. I. I. Like, the sort of the chaos, and the unpredictability. It's kind of life that i've had you never know what the heck's gonna happen. I think i think i was attracted to fire as a kid i i, think my parents were worried i was going to be an arsonist, or something but i just like lighting fires at the back of the house. David. Understandable. If you david if just as a final question and thanks so much for your time today, um if you were given your 20 year old self one piece of advice now looking back. Is there anything that you tell your 20 year old self. Yeah learn how to sell. Carry a bag. Because. Even as a ceo. You spend your whole day selling, you have to sell investors. On. Putting their money into a company, you have to sell, uh. Prospective, employees, on the idea, that they should quit their really. Posh jobs, and come to work for a startup, that can't pay them as much. I mean, all day long you know you're you're really you're selling selling, selling. And i wish i had had the experience. As a kid of even just having a newspaper. Route you know or a lemonade, stand, or, you know something like that uh i think that, it took me a while to figure out, that you know. Somebody's, got to sell this stuff, that's, when the salesman, meets the customer, that's when the rubber meets the road. Everything else doesn't, count, you know and. One of my, uh. Colleagues, once said the only thing software, is good for is to sell. And. Yeah that's a little, offensive. To a lot of people but i i get it you know i mean.
If You build it and it doesn't sell, who cares. Yeah, great points, david, thank you so much for. Sharing your stories i probably could ask you loads more questions for another hour and a half and, get some really good life hacks out of it but, well that's for another day, david if people want to find out reach, connect with you if they want to find out about wasabi, technologies. What's the best way they can do that. Uh just go to wasabi.com. And uh, you know on the, management, profiles, page there's. A thing about me and i think there's a link there that will. Let you contact, us. Fantastic. And obviously, wasabi.com. Yeah and you can send an email to ceo, at wasabi.com. That also reaches, me. Fantastic. David thanks for joining us good luck with the business, uh good luck with winter coming up as well it's going to get a bit colder for us all. Or more also in boston i know how cold it is up there and uh yeah, we'll speak soon. Okay, thank you. We really hope you enjoyed the podcast, today. If you want to listen to more exclusive, tips and life lessons from our guest. Go to the resources, page, at. Fineresources.com.