Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. I wake up every morning and I check Techmeme and I look at the tech blogging world and I read “The Wall Street Journal,” and I feel like I’m pretty up on what’s going on in the tech space. And still, I didn’t know about today’s guest and his company. And they’re a unicorn. We’re talking about $1 billion valuation. It hasn’t been around that long. It’s huge. I had no idea. It’s not being covered. And they’re doing phenomenally well. And I wanted to find out about them.
I’m so excited to have the founder on here. His name is Jaspreet Singh. He is the founder of Druva. It’s the leader in cloud data protection and information management. I feel like, Jaspreet, as soon as you say that, that’s where you lose people. That’s where they go, “Wait. We’re not sharing photos? I don’t get it.” Let’s have a conversation about TikTok. And I feel like that’s where a lot of the tech press misses you. Am I right about that? What do you think?
Jaspreet: Absolutely. I think consumer tech tends to be a lot more interesting than enterprise tech, for sure. And enterprise tech is often time especially when it comes to infrastructure, it’s hidden in the background. So not very visible to consumer audience. The funny part is my elder brother works at WhatsApp. Whenever we’re together at dinner table people ask both of us, “What do you guys do?” He says, “I build a voice calling, video calling in WhatsApp.” And then there’s a one-hour discussion and then they turned to me and, “What do you do?” and I explain what we do and it’s not that interesting [inaudible 00:01:39].
Andrew: And meanwhile, how much revenue are you guys doing right now?
Jaspreet: We just announced two weeks ago $100 million revenue run rate.
Andrew: A hundred-million-dollar revenue run rate. That’s annual recurring revenue?
Jaspreet: That’s right.
Andrew: A company that’s been around, what? Ten years now?
Jaspreet: Ten years now. And the company went through three major pivots. We had to almost reinvent the entire business three times.
Andrew: And give up customers to get here. I should say this interview where we’re going to find out how he did this is sponsored by Toptal. If you’re hiring developers, you got to go check out Toptal, but I’ll talk about those later. Jaspreet, I feel like we could use an example of how Druva helps its customers. Do you have an example?
Jaspreet: Absolutely. Many, many great stories here. I’m going to talk about a few. So data is predominantly everywhere, right? Data is core lifeblood of many organizations be it endpoints or end-user devices or data born in the cloud or in the data center. And for example, one of our, you know, top, without naming the company, top three pharma companies in the world which operates across 80 different countries across the globe had a massive ransomware impact all across their end-user devices.
Andrew: Meanwhile, what was the threat? The people who did this ransomware attack, they said, “If you don’t give us money, we’re going to do what?”
Jaspreet: Pretty much just, “If you don’t give the money, we’re going to delete the data, wipe the data off.” And these are critical researchers researching on their devices, you know, for medicinal research or medicinal devices and the whole life sciences data. Right?
Jaspreet: So pretty critical data and a lot of money and productivity at stake.
Andrew: Yep. And by the way, I should say, as we are talking right now, there is a ransomware attack on New Orleans which shut down the city. So this is a huge issue right now. Okay. So they had a ransomware attack meaning somebody what? Put software already on their devices and said, “If you don’t give us money, we’re going to delete it”?
Jaspreet: Yeah, absolutely. So it’s a piece of software which will create a behavior on the device which will move data, delete data, encrypt data, do all sort of things with the data. And it’s critical because companies lose revenue. Their stock drops, they lose productivity, they’re out of business. Three out of every five SMB companies, small to medium companies, which get impacted by ransomware actually go out of business because they cannot sustain the impact which happens to them. So this whole new trend around . . .
Andrew: Yeah. I see that this is an issue. I didn’t realize it was such a big issue even for smaller companies. When this pharmaceutical company that was a client of yours had a ransomware attack, what did you guys do to save them?
Jaspreet: We got them up and running the next day. As simple as that. So we protect information . . .
Andrew: Because you back up their data.
Andrew: Got it.
Jaspreet: We back up the data and we build a DR plan for the company, which means that disaster recovery plan for the company. There’s a whole different thread now called cyber-resiliency, that it’s not the question of if you’re going to get hacked or attacked. It’s what happens when you get hacked. Right? So what do you do in preparedness for that event happen? Druva comes in, we backup the data to a safe location in the cloud built on Amazon, and then we build a DR plan for them within a given timeframe. Given the scale of the company, they can get back going quickly and this company saved millions and millions of dollars on user productivity, on data not being lost, and was immediately up and running again.
Andrew: I’m going to ask a very basic question. Isn’t this just about backups, like, the kind of stuff that we used to do on our desktop computer, save it on an external hard drive, your computer gets lost, your data gets corrupted, somebody steals your data, you just recover from a backup drive? Is that all you guys do?
Jaspreet: So backup is . . . Absolutely. So the very, very fundamental level, yes. The highest level, the core differentiation we have, the basic concept of backup is a concept called air gap. You’re supposed to create an air gap between your core data and the backup. If you do your backups on a local drive or a local computer or a local location, it is prone to run somewhere as well. So you have to create an air gap to a remote location.
Andrew: Meaning if it’s directly . . . If the backup drive that I have is directly connected to the computer that I use and the computer is attacked, there’s nothing to stop the attacker from also hitting the drive which is also connected. So you’re saying you make sure that it’s an air gap. I know I’m oversimplifying by comparing it to an external hard drive. But essentially, that’s one of the things that you do. Make sure that it is backed up, but where I oversimplify it and say just a hard drive that’s connected to my computer, you remind me there are other issues, you want to make sure there’s an air gap, etc. You do more than that, though, right? Can you give me another example of what you do?
Jaspreet: Absolutely, at the enterprise level, there are many, many issues surrounding data and data resiliency, right? And at scale, things get more complicated, right? How do you manage this massive amount of data for thousands of users and the same problem could occur in data center or cloud services? So Druva has this, you know, massively simplified cloud service just like an iCloud built for enterprise which could backup and build an end-to-end solution for backup, disaster recovery, e-discovery, resiliency, end-to-end solution or entirety of the enterprise data, be it on a laptop, be in a data center or running in the cloud like Office 365, salesforce.com, etc., etc.
Andrew: Got it. As I understand it, you’re working before this at a company called Veritas, one of the . . .
Jaspreet: That’s right.
Andrew: . . . biggest software companies in the world, again, not as well known. What were you doing for them?
Jaspreet: So Veritas was the largest company before it was sold to $12.8 billion to Symantec as one of the largest known software company doing storage solutions. They distributed data management solutions for data center, be it backup, be it primary data, just core [interact 00:07:59] with the company. What we are building is the Veritas for the cloud era. As enterprises are digitalizing, you know, they’re transforming to be internet businesses. If you think about United or Domino’s, they’re not classic businesses to sell you airline tickets. They are actually using aircrafts and now going on internet to be an internet company. United only makes 69 cents, for example, for a ticket between entity set for New York, right? So they’re all about code sharing. When these code businesses digitalize, they rethink their entire data strategy, what happens to my applications, my data and how to move to cloud, right? In this whole journey to cloud, there’s this whole thought process around, how do I re-architect my entire application stack to make it work in the cloud? And data is the core of it. So how do you manage data at scale in the cloud is what Druva does for a living.
Andrew: Okay. I want to understand how you got here, where you came up with the idea, what you were doing just before. And so what were you doing at Veritas? It seems like it’s something very similar to what you’re doing here.
Jaspreet: When at Veritas I was an engineer, a technical engineer to work on one of the core products to store data, store and retrieve data. When I left Veritas, I did a soul searching for a year and came with an idea to build a . . .
Andrew: For how long did you do soul searching?
Jaspreet: For probably a year. I was just travelling . . .
Andrew: For a year.
Jaspreet: For a year, yeah.
Andrew: And you were doing this traveling from where to where?
Jaspreet: So I was just a . . . It’s a long story, but I was 20, 25 years old and I was bored of my job in a big company, and my dad used to be a predominant position in the Indian Air Force, and he had a pretty good traveling job. And I thought to myself I could travel with him, besides him, next to him to see the rest of the India and some critical positions across the border.
Andrew: So while he was in the Air Force, you were traveling with him?
Jaspreet: I couldn’t officially travel with him because given his position, but I could travel just pretty much besides him as not officially but . . . So I saw a lot of . . . India has very interesting neighbors. So we had a lot of good travel across the border. I soul searched and thought about what’s next in life. And I came back with . . . I was stock trading. I was making money on metal mostly.
Andrew: On metals?
Jaspreet: It was a time of the . . . It was a particular time of 2007 and ’08 where auto-sector . . . Few sectors were booming, and I did a math that a few sectors were booming so with metal and a commodity trading and especially metal stocks do very well. I followed London markets. I used to get them in the morning, follow them and the stock exchange and then buy those metal stocks and mostly some commodities, some stocks and the new market and . . .
Andrew: Wait. I’m sorry to interrupt but I really want to understand the way you think, and this has given me some insight into it. What did you see that told you that metal . . . And by metal, we’re talking about silver, gold, what? Copper? You were buying those commodities on the market the way some people buy stocks and you realize, “Hey, you know what? They go up and down based on?”
Jaspreet: So based on certain industries depend upon metal heavily like auto.
Andrew: Got it. So if the auto industry is going up, it means they have a lot of sales, that means that the metal that goes into creating cars is going to have to rise up because more of them are going to be bidding on it. If you notice one happening, you traded the other. And this wasn’t already factored into the market?
Jaspreet: It always is, but most of the stock trading is mostly hedging their bets on a daily basis. Right?
Jaspreet: I wasn’t buying commodities. Mostly people buy a commodity that [inaudible 00:11:28] futures. There’s no fluctuation commodity when an industry goes high immediately, but the stock is correlated. So you can see, you know, the metal stocks of steel manufacturing plants or aluminum manufacturing, those go up and down. Right?
Jaspreet: And if you’re limited in money, you could do day trading, a lot of optimization to make money in those market sentiments by just short-selling in those areas. So, as an engineer, I was pretty excited about what’s happening. It was easier way to multiply my savings before I could start my business.
Andrew: And you knew . . . Well, you had a sense it seems to me that you were going to start a company. I’m wondering what do you do to soul search to figure out the next step? Do you sit and read books? Do you journal? Do you talk to your dad? Do you talk to potential customers? What do you do?
Jaspreet: It depends on what stage of life you are in. I was pretty young to not have any midlife crisis. So I was at that time mostly figuring out what’s happening in the world. What are the list of Fortune 500 companies which could get disrupted and how and when? Which companies’ business model doesn’t make sense right now?
Andrew: Really? So you’re looking around, you said, “Look, the world is changing. Who’s going to be out of step?” Give me an example of the business that you saw out of step that you didn’t end up going into. What’s an area?
Jaspreet: Actually many, many area. At that time we thought about learning that people are trying to crack learning and we felt . . . Well, the major mistake people are making is majority of learning today is social. You don’t go to school to learn. You often go to school to have a social experience towards learning, right? Majority of learning, e-learning at that time was a one to one. There wasn’t a social experience about learning. Even simple things like learning around playing a guitar or learning to play a guitar or basic experiences were very one to one. So we thought about a social learning experience as an industry to crack into solve for e-learning. It was a pretty, pretty big market.
Jaspreet: The many areas explored about what’s happening, health was a pretty big. If you look at health some interesting companies, which are much, much, much bigger than where they are. Paper was an industry. So we looked at multiple Fortune 500 companies, what their business model is, how they make money, which would be destructed. Obviously, we were naive. We were trying to figure out what happens with industries. And pretty much then it occurred to us let’s look in our own backyard, the company we came from, Veritas.
Andrew: And it’s looking at . . . Because I want to understand the process that you went through. You said, let’s look at the top 500 companies in . . . the publicly traded U.S. companies. That’s what the Fortune 500 list is. So how they’re making their money. Which of these is actually outdated and maybe we could create the new modern version of it? And after doing that, you still look back on it and you think you are naive. Why do you think that was naive?
Jaspreet: There are a lot of factors which goes into how the whole cycle of evolution works. Sometimes there’s a concept which we called in Druva is called Maya, M-A-Y-A, most advanced yet acceptable, right? It’s a very . . . Getting a product-market fit right is just not . . . It’s a lot about timing than about a business model. Right? So you know a business model is pretty dirty and has to be broken into, but the timing and everything needs a lot different skill, and oftentimes, it’s luck to start with. So we looked at multiple business models. What happened was the same time, 2007, there was a massive earthquake in India. And at the same time, SOX compliance was coming to India saying that, “Hey, majority of banks don’t have a very solid disaster recovery story. If an earthquake happens, you’re out of business because we lose people data, and data is money, because money is stored in transactions, not really lockers of the banks.”
So we pivoted our thought process say, “Hey, wait a minute. This is in our backyard. We came from a data company. Banks and financial systems would invest heavily into disaster recovery because of geo-events around big global warming doing more, you know, typhoons or anything happening or hurricanes happening in the market. So let’s look at disaster recovery for financial sector.”
Jaspreet: So we focused on that. We build a damn good software, but I remember one call, the customer when the customer said, “This is great. But you know what? No one wants to buy a car from Argentina.” And we were like, “What does it mean?” He said, “Well, even if you make the best software in the world, nobody is looking to buy a high-end financial services software from an unfunded company out of India.”
Jaspreet: And that was an eye-opening statement saying, “Hey, you can really solve for a business case, but timing, your location, how you go to market, who can trust you with what matters a lot.” It’s not as simple as building something to . . . So that was the first pivot we’ve made to saying, “Okay. If people don’t buy cars from Argentina, what do they buy from Argentina? What can Argentina make to support that? And we changed our thought process to say that, “Hey, we got to be living out of India. We got to be an internet company to solve something which can be around data, that’s a passion, to be in and around. What could they buy off an internet without interacting with human beings because we cannot physically see them and meet them and do a traditional enterprise sale?”
We pivoted to build a backup software which could solve all the needs of data outside of the data center. Long story short. We did a good job, build a good software. Sequoia Capital came looking. I met with Mike Moritz who was the ex-CEO of Sequoia. He happened to be in India. I got a meeting. And I was lucky enough to get funded by Sequoia. We were one of the first product companies to be funded by Sequoia into India. I moved to the Valley, 2012. Actually, funny story is I applied for a visa to move here after Sequoia Capital funded, got denied my visa saying, “You don’t look like a CEO. We don’t trust you, so go back.”
Andrew: What do you mean by, “You don’t look like a CEO”?
Jaspreet: Well, you know, truth be told, there are not many . . . There wasn’t a precedence person of brown skin wearing a turban being funded out of India by Sequoia Capital come to Valley, right? So I got the [inaudible 00:17:56] denied my visa. Obviously, Sequoia Capital came to help and finally came to the U.S., understood this is a place to be to build a business and then realized there’s a whole new momentum called cloud happening. And cloud just isn’t a technology. It’s a massive business mindset shift. Right? People would be buying, you know, technology without trying to understand how it comes to [patient 00:18:22], right? So we, again, did a massive pivot to be a cloud company. And that was a third major pivot.
Andrew: I want to understand that first thing. So the first thing that you said was, “We’re going to back up your data,” but people did not want to, as you said, buy a car from Argentina. And so you changed to what? What was that next change in response to that?
Jaspreet: Financial sector disaster recovery versus a simple backup for your data outside . . . It sounds similar, but financial services companies do not generally trust people with their infrastructure unless they have a few years under their belt.
Andrew: Okay. So it went from saying, “We’re going to handle the financial sectors,” as you mentioned, “Sarbanes Oxley and other financial-related regulations were coming and you wanted to jump on that.” And he said, “You know what? They are not going to buy from us because finance industry doesn’t trust us. We’re going to go more general. Is that right?
Jaspreet: And even though it may sound . . . Absolutely, yes. And even though . . .
Andrew: It does.
Jaspreet: . . . it does sound disaster recovery and backup may seem similar. They actually vary by use case by financial sector. So backup is a little less critical than a full-fledged disaster recovery for a bank, right. So we solved the less critical market problem. And the way we solved it was not enterprise door-to-door selling, but building the software which is more to be sold on internet. People could download, deploy, they like it, they gave us a call. So if someone has a fire brewing, they don’t ask for the brand of the water, right? So they just asked for help. So we made the software so simple, so easy, so available that you could download, deploy, they like this, they give us a call and they bought.
Andrew: And they could use it before they even called you and talk to you?
Jaspreet: Pretty much. We defined . . . We were the first one to define a freemium model on a traditional enterprise tech, in this particular case and in backup of storage. There’ve been many of the freemium models. We applied the freemium model here to break into sort of an internet-oriented sale.
Andrew: And when you say that you reduced the features, what did you reduce it to? What could it do?
Jaspreet: It was designed . . . Initially, the software was designed that many, many people who have, let’s say, one of the customers had, you know, over 84 oil rigs across the world, right? In this location, they still produce a bunch of data, or a shipping company, or manufacturing setup, they produce a bunch of data, and they don’t have the manpower . . . They don’t have the physical manpower, the workforce to manage systems and application. They need software which could do a really good job without too much, you know, investment in people and manpower. So then we build a software which could manage these remote locations from a data management backup recovery perspective. So the data is not lost, which is a very important data in oil rigs and shipping sectors and [manufacturer sectors 00:21:23]. So we bought core to be saved with but without investing in people’s time and effort. So not as critical as financial sector DR. Still critical enough that they spend a bunch of money.
Andrew: Got it. What was it like to meet Michael Moritz? He is a legendary venture capitalist. I’m looking here at the list of investments that he made. He’s an early backer of Google, Yahoo, PayPal, Webvan, but okay, Zappos. The list goes on and on. What was it like for you? You knew his background when he said, “Jaspreet, let me talk to you,” after you were being told that you are from a country that people didn’t trust buying software from, he comes and talks to you and you think.
Jaspreet: Yeah, it was a great meeting. It was the first billionaire I’d ever met. And I haven’t met many billionaires even since but he was the first one I met. It was a great meeting. I met him in a location in, I believe, New Delhi. I had half an hour meeting with him, very humble guy. He was a . . . Also people don’t know much about but he was an ex-Times Magazine reporter who came to Silicon Valley and became a venture capitalist. Very humble guy, met him, liked him . . .
Andrew: I’m looking at his Wikipedia entry. I didn’t realize this. In the 1980s he was a reporter for Times. Steve Jobs contacted him to document the development of Mac for a book he was writing about Apple. So I see that his history here in the space goes a long way.
Jaspreet: That’s right. And Apple was funded at Sequoia Capital. So, when Steve Jobs and Mike did not have not only good relationship, but they got along and for his knowledge of industry and his acute understanding of business, he was hired by Sequoia to be a partner and the rest is history. Very interestingly, I remember I built a business case, I was fully prepared, very humble guy. And I thought I’ll take half an hour with him, but I believe my presentation ended in 10 minutes. He just wanted to rush through it. And I was surprised and he said, “You know what? I know about the space. I’ve seen the space.” And then there was a golden silence. And I was like, “Mike, so what’s the next step?” He said, “You know what? We’re not in India to fund tech here. We’re in India to fund movie and coffee and consumer goods. That’s the main market is right now. But tell me more about you. And we’re here to fund teams and people. And tell you more about you. What’s your team? Who are you?”
And we had a great discussion about what’s the passion, what’s the drive. He said, “You know what? You have done something which nobody else has done so far of building a product, a deep tech product out of a place you haven’t funded companies in. We like what you are doing. You fundamentally believe in people who could build something good. Let’s follow up and see it through.” And I had a great fortune of meeting a partner who was just moving from the Valley to India, Shailendra Singh. He and I got along very, very well. And he said, “Look, this sound interesting, you sound interesting, the team sounds good. You’re going to find the team, but you have to move to the Valley to realize the full potential of business plan.” And trust me when I change a business plan, the moment you see the full scope. And I moved here and I saw this megatrend called cloud and we had to . . . It was a holy shit move to reinvent the business and take it all over again.
Andrew: That is amazing. I’m going to take a moment to take a break just talk about my sponsor and come back in. My sponsor is a company that you should know about, by the way, Jaspreet. It’s a company called Toptal for hiring developers. You probably have heard of calm.com. It used to be a meditation app. It’s now expanded to meditation and sleep. Are you in San Francisco?
Jaspreet: South Bay.
Andrew: South Bay. Their billboards are here in San Francisco as I drive to South Bay or North Bay and I see them all the time. This is the app that helps you fall asleep. These guys are another billion-dollar business, but they had an outage where their whole site just went down for a bit. And thankfully, they hired a developer named Christopher Stobie from Toptal’s AWS DevOps division, Amazon Web Services. And the guy was on board and he said, “You know what? I think I can solve it.”
He solved it for them, got them back on board and ended up with a solution where Amazon, here, fully managed cluster that would be managed by AWS by Amazon instead of being self-managed to eliminate this problem in the future. The point I’m trying to make is with Toptal, you get the best of the best developers. Calm, I think it was $40,000 every . . . Let me see how long it was. Forty thousand dollars per hour they were losing a new sales because of an outage like this. But because they hired one of the best developers out there from one of the best people out there from Toptal, they were able to recover quickly.
If anyone is listening to me and you want to hire developers, the best of the best developers are on Toptal. All you have to do is go to toptal.com/mixergy, hit a single button, you get on a call with a matcher, they talk to you, and then they introduce you to developers. If you’re happy, you can hire them. If you’re not happy, just walk away. And even if you hire them and you’re not happy, they will still back them up and make sure that you don’t pay unless you’re happy. Go read details of it on toptal.com/mixergy where you, even you, Jaspreet, will get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to that no-risk trial period. That’s toptal.com/mixergy, toptal.com/mixergy. You then switched to the cloud, but you already had customers, your software was being installed. You said it was water for people at fire, they were excited about it. What was it like to switch to the cloud from that?
Jaspreet: I think we understood that the first pivot is technology, but behind that entire go to market motion, the entire, you know, everything has to pivot. So we had to say no to customers, we had to say, “This is the direction we’re headed. This is why it’s great for you and great for us and great for our industry.” If Druva gets it right, the industry wouldn’t be same ever again. And a lot of them came along, a lot of them did not, and we had to make a hard pivot to the complete restart of the go-to-market motion and probably the best bet we made.
Andrew: Do you remember a conversation you had with a customer where you basically were firing them?
Jaspreet: A lot of them. I think one of the first few customers who trusted as for all the oil rigs and said, “You know what? We don’t have a man . . . We have a mandate not to go to cloud.” And we tried to explain to them that, “Look, we will give you a software free forever, but this is exactly what we’re doing. You can use a software, which you already have. We don’t mind charging you a lot more for it, but this is where the cloud is a great story. A lot of them said no because they had a corporate mandate. We had to get a new set of early adopters, a new set of industry. Like pharmaceutical sector was not open to us before, but massively adopted us when they moved to cloud. And a lot of customers actually came back after multiple years saying, “You made the right call and we are back with you.” So not an easy thing to do, but I think in hindsight, the best thing we did.
Andrew: How much revenue did you have roughly before this transition, just to understand how much you were sacrificing?
Jaspreet: We were . . . In raw numbers, I think we were like $6 or $7 million, but the first . . . It takes almost three to four years to get to a point where you have to get going and you have first hundred customers. And to do it all over again is . . . The first million is the hardest. The restart caused the computer to rethink and redo everything, but I’m still glad we did it.
Andrew: What was it that helped you realize that you needed to make that change? Was it a conversation with one of the advisors? Was it Mike Moritz? Was it somewhere else? Was it a customer that talked to you?
Jaspreet: At that time Dropbox and other companies were coming along. We could see the future of enterprise, the future of data. At the same time, we met the CTO of AWS or Google, me and my co-founder had a breakfast and he white-boarded what they’re doing with AWS, what the future of cloud means, future of data means, and was a pretty, pretty incredible moment to understand what could happen. We felt if we keep on doing, we could be a great company, but if we rebuild our entire story in cloud, could be a generational shift in our industry. And so entrepreneurs, you know, depend upon the bets they will take and nobody else would take and how big those bets are versus how safe those are. So we placed a big bet and I’m glad we did it.
Andrew: I’m wondering what it is about your personality that allows you to do that. You had a great job. You give it up for a year to just tag along with your dad and to figure out the next step. By the way, as you said that I kept thinking about everything that we hear on TV today about Indian parents, like, wanting their kids to do so much. I can’t imagine what it was like for your dad to see that you quit your job to go figure out who you were. And then, again, you finally are onto something and you give that up to go start again. What is it about your personality? You said it’s taking big bets, but I feel like it’s something else that I’m not picking up on about who you are that’s represented and you’re saying, “Yes, things are good, but they’re not as great as they could be. I’m sacrificing the good to take that next level that most people wouldn’t even see.” What is it about you?
Jaspreet: Hard to comment upon that myself. I think reinvention, recreation is a core to entrepreneurship. Also looking back I had nothing to do. I was 26 years old. What could have gone wrong? You could do the same thing again and again, but if you had nothing to lose, you take more risk.
Andrew: You weren’t worried about letting people down who worked for, you weren’t worried about letting your investors down, you weren’t worried about going poor yourself after coming to the U.S. None of that.
Jaspreet: None of that because if you don’t make mistakes at that time, you don’t learn. If you make mistake at that time, everyone says that he’s learning. If you make mistakes as you grew older, people say that he’s stupid. You’d rather make more mistakes to avoid the big one.
Andrew: Okay. You told our producer Brian Benson, “You know what? Our first customer is still a customer today, but truthfully, they initially were not very happy.” Why? What was missing? What was going on?
Jaspreet: See, the customer is not happy with you only when they like you, right? Because if they don’t like you, why will they get on the phone call to tell you how crappy you are?
Andrew: You know what? I noticed that too with myself. If I’m not happy, I’m not calling to complain to the company. But if I liked the company, then I want them to know, I want to help them out. That’s what you’re saying that if someone’s coming to you and saying, “Here’s where I’m not happy,” and with passion, you know that they’re feeling that passion towards you, the company . . . Got it. Yeah, yeah. That’s such deep insight that took me a long time to recognize.
Jaspreet: And most great products are not built on a bunch of features which help a bunch of customers. They’re built on one unfair advantage which nobody else can provide. It’s almost a love at first sight between the product and the customer that they both realize the unfair advantage the customer is getting from the product. And in this case, the first customer, they really, really wanted that product. They loved the idea of not have to worry about backups and DR and moving it all to cloud. But we were immature what their enterprise setup. So they got on a phone and they blasted us and blasted me and blasted the sales guy and I was smiling . . .
Andrew: Because you couldn’t do what? And by the way, I should say, DR, data recovery, right? What’s it that . . .
Jaspreet: Disaster recovery.
Andrew: Well, what was it that . . . Oh, disaster recovery, excuse me. What was it that they were so upset about?
Jaspreet: So, typically, an enterprise has a bunch of feature request on . . . You solve one thing very, very well, but then there are thousands and thousands of feature requests for enterprise things like authenticating the right users, building the right reporting, building the right . . . All those things that you build over time and if you don’t have those customers, don’t feel like they can use a product at scale, but because it solves such a deep pain point, they really want to give you a chance. And when a customer gives you tough feedback, those are the best customers because they are spending time with you and you are learning incredibly well in that moment to . . . Pretty much an entrepreneur or a CEO should have a nose for trouble. They should look for trouble and just dive deep into it because they’re going to learn so much from it. Right? The happy customer barely teaches you anything.
Andrew: And so what did you learn from them that you needed to do?
Jaspreet: A lot of things. I think they wanted consistency, they wanted predictability, they wanted SLAs, defined SLAs across the globe. They said, “I pay you. I don’t care if I use you in San Francisco or Moscow or New Delhi. I need consistency of service, same quality of recovery of data, same assurance of my data at the same time.” It’s very hard to deliver different networks, different clouds, different all those things, but we could see that they really, really want us and really helped us build those things for them.
Andrew: Okay. Did you know that they were a customer before you started creating this cloud version of your software?
Jaspreet: No, we just discovered them. They found us. I think that’s another beauty of solving a deep pain point in a market. When you solve something which people need, they come looking for you. You don’t have to look . . .
Andrew: How did they find you?
Jaspreet: Early luck, beginner’s luck. People . . .
Andrew: Were you speaking at events? No.
Jaspreet: No. I think Druva had a strong focus on digital, right? We have to be internet-oriented. We have to be the competition with how easy Druva is accessible to customers. So we took pride in making a software incredibly easy to find, incredibly easy to try out and people would try it out, then give us a call with not spending money on marketing, not spending money on events, not spending any of those things. You’re not optimizing for leads, you’re optimizing for conversion rate, you’re optimizing that those five people who find you, love you and spend a bunch of money on you. That’s the early part of the software journey, of the startup journey.
Andrew: I just found an early version of your site from November 2010. Enterprise laptop backup. That was Druva inSync. Druva inSync is fully automated laptop backup software which protects corporate data for office and remote users. It’s still available Druva inSync, right? Is it still . . .
Jaspreet: It is. It is. So the website I saw had a focus on a very niche market for only remote people. It went down from disaster recovery for financial sector to backup or remote setup to a cloud version for . . . Predominantly, 2010 is not the year we had already gone to cloud, ’13 is when we went to cloud. So what you’re seeing is probably a softer version of a product we built for just laptops.
Andrew: There’s one also for desktops, Druva Phoenix, but it does give me a sense of the evolution. I see that you’re finding a problem that people are walking around with laptops that their boss gave them and years ago the laptop would have been a computer on their desk that was easier to manage. Now they’re walking around with it. And what does the company do for data recovery? I get it. I see the evolution. I see how you’re getting. Right from the beginning even though you’re right that this is not showing me the cloud version of your site. Very quickly, my eye goes to the download button, and very quickly, you’re getting me to see what this does and try it, right? This was part of your culture. I get how that got you to a few customers. The next step from what I understand from Brian Benson’s, the producer’s conversation with you is, you then had to start to bring in a sales team, a marketing team, an admin team, right?
Jaspreet: Absolutely. The first million-dollar you make is mostly a test of the market. The next $10 million you make is mostly a test of product-market fit. And can you build a recipe you can have a sales team, a marketing team and they can have a product-market fit, they can have a model, they can go after some sort of predictability of bringing in sales? The next 100 is all about scale. Can you scale into building more teams and more marketing and more dollars and more channels and all those things? So we had to bring in sales team, we had to bring in marketing, and you scale over time.
Andrew: How did you learn how to hire these departments, how to set it up? As you said, you’re a guy who started out in his mid-20s with this. Suddenly you’ve got a company that’s grown fast in enterprise. You’ve got to establish all these systems, all these departments, all this everything. How did you do it? How did you know how to do it?
Jaspreet: I think I was lucky to get a great set of people around me who showed me the path. You have to be curious enough to know. You have to be lucky enough to be surrounded by great people. You also have to be okay to make mistakes and recover from it.
Andrew: So who are the people around you who helped you figure out what to do and recover from mistakes?
Jaspreet: A lot of great people came along. I think I was lucky enough. And early in my years when I came to the U.S., a gentleman called Yoram Novick was one of the first independent board members who joined the company. He was pretty helpful to understand how . . . He was an Israeli immigrant himself. To help understand how Israeli companies have done it for a long time on building a market in the U.S. I was very lucky to have some great board members from Sequoia Capital, as I mentioned Shailendra Singh. Over time, Tom Banahan from Tenaya Capital had been an instrumental advisory board member for last six, seven years. He had built large scale sales team himself. He was an operator in the past. Right now I’m lucky to have a gentleman called Mike Gustafson, the chairman of the company, the two-time CEO to sort of held the footsteps of how to build, how to think. I personally made many, many, many mistakes in hiring incorrectly and correctly and learning over the years and running functions and not running function and a bunch of stuff.
Andrew: I’m looking at these people up as you’re mentioning them. I happen now to be on Yoram Novick’s LinkedIn page. I could have sworn I saw him. He’s not an investor, is he?
Jaspreet: He made his money in a startup which he sold to NetApp about seven, eight years ago. So he could be an investor . . .
Andrew: Oh, no. I mean, an investor in your company. I know that he does some angel investing too.
Jaspreet: No, he’s not.
Andrew: He’s not. Okay. So if you turn to him or turn to others, is it a formal process? Is it just you making a phone call? Is it over dinner? How do you get feedback? How do you get input? How are they guiding you?
Jaspreet: You meet consistency. You have to have people who have a shared vision who are passionate about what you’re doing, who are passionate about how you’re doing it. And you have to have a shared vision with them. And then you have daily problem solving, you know, how to add funds.
Andrew: Actually, I see it. He’s a board member or he was a board member.
Jaspreet: He was a board. Yes.
Andrew: Got it. So it is a formal situation.
Jaspreet: That’s right.
Andrew: When you turned to . . . You found him. You invited him to the board?
Jaspreet: I did, yes.
Andrew: And in a formal way now you knew that he was going to be there for you to bounce ideas off of to guide you. Got it.
Andrew: And then there’s a financial incentive for him to do well if you do well, so I see how you’re both aligned. You’re mentioning mistakes with hiring, mistakes otherwise, and I kind of cut you off because I wanted to understand how you get help to get to where you are. Now that I know that, tell me a little bit about the mistakes that you’ve made. What’s the big one? So far it looks like everything is working.
Jaspreet: No. A lot of things they never go as planned. I always take more time and spend more money as you go along, right, from not hiring the perfect people for the job to not investing in people to your own self-learning. I made mistakes in hiring wrong. I made mistakes and opening too many markets too quickly. In one single year we were in eight different countries and we had to scale back, couldn’t afford all of them.
Andrew: What happened when you went to eight different countries all at once?
Jaspreet: You learn that every country is just not about creating salespeople, it’s about creating marketing people, legal laws are different, cloud contracts are different, channel [relations 00:42:02] are different so you have to invest and all has to adapt to a new country. And entire org is not ready for it, so you have . . .
Andrew: Was there one country that was especially painful for you?
Jaspreet: Yeah. Man, I . . .
Andrew: I’m laughing because I saw your expression as I asked you. Yeah, what is it?
Jaspreet: The country, I would be pissing off a lot of customers in the country if I talk about it, but there are some countries which a startup should never go in this age, and we went to all those countries and paid the price . . .
Andrew: And what makes a country bad or tough for a startup to go into?
Jaspreet: U.S. is a great country because we have 300 people would speak the same language. There’s no one city. They’re all concentrated in many, many, many cities, so you can hire a bunch of people. You hire somebody in Memphis, you have FedEx, you hire someone in Atlanta, you have Delta. Right? You have . . . Every city has a multi-billion-dollar company you can go and attack. And it’s a great market for mid-market. There’s too many . . . There are a lot of small and mid-market business is going very, very well. There are a lot of large companies and it’s doing very, very well.
It’s not the same for other countries. Either you have a language barrier or political barrier or not friendly with the cloud laws or [inaudible 00:43:17] government or too slow decision-making process or a cultural barrier to sales. So all those things don’t exist in the local market, hence most startups, especially in enterprise or even consumer focus in this market. And then they have to be very, very careful selectively scaling to different countries.
Andrew: When you had to scale back, how tough was it for you as a person, as a leader?
Jaspreet: I think it’s easier. I’m a fairly rational guy to make such decision, but, you know, it does get emotional because there are aspirations, there are people involved, all those things has to happen. We have the customers involved. How do you deal with customers and people and the aspirations and emotions and . . . And so we had a way to formalize a process on how we promote or demote a country, how we think about a business plan in the company which shouldn’t look like a one-man shop, but how decision making gets done across the company and we all look at the same criteria and we all make decisions. How to do business plans and solve them.
Andrew: So it wasn’t just us saying, “I think it doesn’t work out.” It was you and the team coming up with a criteria for what makes something not . . . Got it. And the benefit of that is what? One benefit I could see is it takes it away from you as a CEO who gets to capriciously decide what happens. The other benefit is?
Jaspreet: I think it’s . . . I’m not afraid of decisions. As a CEO, you have to make decisions and you should never be afraid of them. And you have to be 99.9% right. But it’s not you who’s right, it’s the people’s feedback, people who think independently and can feed into your decision, which is very, very, very important as well. So you have to build a culture of entrepreneurship and you have to also celebrate failure. You have to build both, right? If you don’t celebrate, if you don’t acknowledge and celebrate failure, if some people acknowledging and openly saying, “I failed,” then you don’t build a culture of entrepreneurship, you don’t build a culture of risk, then the company does not take risk and does not scale very, very well. Right? So we had to build a culture of entrepreneurship and risk-taking across the company.
Andrew: How do you celebrate risk so that people feel comfortable taking it? Or celebrate failure, I mean.
Jaspreet: It starts with me. I have to openly acknowledge decisions I made and I made them wrong and say, “I was sorry. And here’s what I found out I was wrong and why and how and what I’m going to do about it.” Once you openly acknowledge, you promote people to say, “Please make a decision, but if you do fail, you have to come back and openly acknowledge to your entire team who’s responsible, who was equally connected with you on this decision.” So it starts with you and when you start doing it, people come along and they acknowledge it and they start to build a culture of risk-taking and entrepreneurship.
Andrew: I’ve heard that. People who listen to me from some countries will say . . . Japan is one. I’ll be open about that. They’ll say, “We can’t take risks here. The shame, the failure, the challenges around failing are just really high.” And I wasn’t sensitive to it when I started doing interviews. And I could understand that if someone’s considered a failure because their company failed in Japan, they’re less likely to take another shot because the risk is too big. You said at one point that Silicon Valley is Hollywood for geeks, which I think is right, especially now that certain people are getting celebrated and other people are not getting attention. But the follow up to that that you said was, people don’t understand the importance of persistence as an entrepreneur. What do you mean? What are we not seeing as we’re studying entrepreneurs and celebrating them that you’re noticing that you want us to pay attention to?
Jaspreet: I think a couple of things I’ve noticed, one, is there’s a whole what we called expectation of an overnight success. Everybody is try . . . Everybody is out to tell everybody else how quickly they became successful as if it’s a Hollywood and they got lucky in a movie, right? You are a surfer, you’re out there surfing, all you can do is discipline to be ready. You cannot time the waves, right? If you’re a person who’s paragliding, all you can do is discipline to be able to fly when the wind is there, but if the wind doesn’t come, nothing you can do about it, right?
So the persistence, the perseverance to track the right wave for you. It’s too small, you’re going to crash. It’s too big, it’s going to crush you. Right? Crush you, right? But the discipline to be ready and the hard work put in place to be cut of a cloth . . . You can go through fire. People don’t really value that as much, right? They want to look at the end result and glorify the end result too much.
Second part is that there’s a real that’s called venture capital or venture in general. The cookie cutter approach a lot of VCs have, there’s no venture left. There’s no risk left. They have a form . . . They want to make everything formulaic in terms of what you’d expect from a growth numbers. Most businesses which break out, break a formula, break an expectation. That’s why it’s called a venture business, right? So the risk-taking ability, the focus on persistence, perseverance, the focus on sacrifice is oftentimes a lot less celebrated than success.
Andrew: Yeah. That’s why I wanted to spend some time and understand what you were giving up when you switched to the cloud, what you were saying no to, and the guts that it took do that. I have two things that I wrote down that I wanted to follow up with you on from this conversation. One is business, the other is personal. Let me start with the business one in case you want to throw me out for the personal. The business one is, you mentioned that the pharmacy . . . that you lost a lot of customers when you went to the cloud, but the pharmacy companies were much more open to you. I don’t think of them as pioneers, especially, not when it comes to software. Why did they suddenly open up as clients?
Jaspreet: The amount of research they need to go through for their molecular science or drug discovery was only possible in public cloud given the amount of compute needed and the number of research. So they open to . . . Who open to cloud? People who are massively distributed, which will invest into a lot of infrastructure. People who are research-oriented. They were building a data science effort or a scientific approach to solving problems and only possible in public cloud. So they’re . . . The security teams, the operational teams, they’ve already vetted out cloud. So I think 7 out of top 10 pharma companies or licenses companies today are Druva customers. We got a great breakthrough into technology companies, great breakthrough into manufacturing setups, state and local governments. So a lot of good breakthroughs there. We could not break through early on with financial sector, the financial services, although now they’re getting on cloud.
Andrew: Right. And the personal . . . It’s not that personal, but it kind of is. When you were saying that you were turned down from getting into the U.S. or getting clients because of where you were from, because of the turban, because of the dark skin, etc., in my mind, I was wondering, “Did he consider getting rid of the turban? Did he consider change . . . ” I changed my name. Did you consider doing anything like that and saying, “You know what? If they’re not accepting this, I’m just going to give them the outer expression that they’re looking for because the inner is still there.” Why didn’t you decide to do that?
Jaspreet: But you are who you are, not much you can do to change that. Identify yourself in a certain way. You have your own . . . If you don’t have your identity, you pretty much have nothing, right?
Andrew: But is your identity in your name? Is it in the . . . It seems like it isn’t in these things.
Jaspreet: It depends where you come from. And for a lot of minorities, a lot of people of color, a lot of people for a particular culture or religion, it becomes their identity because they grew up like that in a minority setup. It becomes part of their faith, part of their value system, part of how they look at themselves, how they look of the world. It is very intertwined. So it’s very different if you grew up in a non-minority setup. And things are a lot different, right? So I did not think of that as a failure for color or religion or any of those things. I just feel saw of failure for system, that the system doesn’t have a precedent of accepting a CEO from a part of the world which they haven’t seen before. And I tried again and I succeeded. So you just solve problems and then go on.
Andrew: All right. Druva is in Sanskrit means north star?
Jaspreet: Yeah. Even more beautifully in Swedish language, it means “the grape,” “the wine grape.” So two really good meanings.
Andrew: Why is that even better? Feels like north star makes so much sense. They’re there to protect people and their data.
Jaspreet: I’m just kidding. I’m just . . .
Andrew: Oh, I see what you mean. Yeah. I’m a little slow or a little obtuse. All right. The website is druva.com. Congratulations on doing so well. Thanks for coming on here and telling your story. Like I said, I saw a lot about the enterprisey part of your story. I was really fascinated by the entrepreneurial and personal side and I appreciate you coming on here and talking about it. And I want to thank the sponsor who made this interview happen. It’s Toptal. They’ve been supporting me now for years and years and years. If you’re looking to hire developers, really, they’ll be there to solve the problems that you have today and that you know about, but also as you heard in the example I gave you calm.com, the billion-dollar company that’s helping people fall asleep well and meditate, they didn’t even know they were going to have the problem. Then they had a Toptal developer on hand and he solved it for them. Go to toptal.com/mixergy to get, really, these phenomenal developers. toptal.com/mixergy. All right, Jaspreet. Thanks so much for doing this.
Jaspreet: Thank you, Andrew. Thank you very much.