The Future of Data Storage September 7, 2012
Posted by krishparikh in 2012, big data, enterprise 2.0, enterprise infrastructure, startups, Storage.Tags: Data Storage, Event, Flash Memory, Nimble Storage, Nutanix, Tintri, XtremIO
1 comment so far
In the so-called age of “big data”, enterprises will need to contend not only the sheer volume of data they generate (ranging from hundreds to thousands of terabytes), but also to manage the velocity and variety of these new data streams. (1) To put these numbers in perspective, imagine each enterprise storing and analyzing data equivalent to the volume of information catalogued by the US Library of Congress every year! (2)
Recognizing that this explosion of storage growth cannot be managed by legacy infrastructure, both investors and storage vendors are betting on flash memory as the technology to keep pace with the growing data challenges faced by enterprises. Incumbents EMC and IBM have recently made strategic acquisitions in all-flash storage companies XtremIO and Texas Memory Systems to augment their legacy storage solutions. Meanwhile startups Pure Storage and Nutanix have raised large rounds of growth financing, further validating that investors are also bullish on the flash storage trend.
We at Lightspeed were early believers in the disruptive power of flash memory in next-generation storage systems. (3) The decreasing cost of flash memory driven by widespread adoption in consumer devices, coupled with data access and retrieval times 10-100x faster than rotating disk, and a power and physical footprint 10 times smaller than disk well positioned flash to be the transformative storage technology in the datacenter. Our early investments in component technologies (Link-a-Media, Pliant Technology, Fusion-io), systems companies (XtremIO), and software technologies (IO Turbine) centered around flash memory have validated that hypothesis.
To better understand the role of flash memory and its impact on performance, capacity, energy usage, and cost in next-generation storage systems, I invite you to join me at the Future of Data Storage event on September 18 in San Francisco. Hosted by BTIG and moderated by Andrew Reichman, principal analyst with Forrester Research covering infrastructure and storage technologies, the event will bring together five leading companies focused on driving innovation around data storage in the enterprise:
- Nimble Storage is creating hybrid storage systems that converge primary storage, backup storage, and data protection technology in a single appliance.
- Nutanix is creating converged storage and compute appliances that allow enterprises to build Google-like, scale-out datacenters
- Pure Storage is creating all-flash enterprise storage arrays focused on delivering high performance at cost effective price points.
- Tintri is creating storage systems optimized for virtual machines, improving the manageability and cost-effectiveness of virtualized workloads.
- Virident is creating PCIe flash accelerator cards that allow frequently used data to sit closer to the CPU in servers.
As we look toward the future, startups will continue to innovate around flash memory, creating next-generation storage systems stitched together with intelligent software to disrupt existing markets based on disk architectures.
If you are interested in joining us at the event please email eventRSVP@lsvp.com along with your name and contact information. Webcasting will also be available.
I look forward to exploring these trends further during the Future of Data Storage event from the lens of five emerging startups – hope to see you there!
(1) McKinsey Global Institute Report “Big data: The next frontier for innovation, competition, and productivity”
(2) Library of Congress Website, January 2012 Data: As of January 2012, the Library has collected about 285 terabytes of web archive data growing at a rate of about 5 terabytes per month.
Follow us on twitter at @lightspeedvp for more information on the future of storage and events like these.
Investing in Loyalty August 2, 2012
Posted by peternieh in 2012, Consumer internet, startups.Tags: consumer, funding news, loyalty
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“Customer loyalty is the single most important driver of growth and profitability. – Harvard Business Review
Today, we are excited to announce our investment in FiveStars. Founded by Victor Ho and Matt Doka, FiveStars makes it easy, and affordable, for retailers and merchants to reward their most valuable customers. It is the first loyalty offering that integrates directly with over 90% of existing point of sale (POS) systems and is already being used by hundreds of merchants.
So why loyalty and what makes this company and market interesting to us?
In the face of economic pressures, consumers are thinking more carefully about every purchase, and retailers now face more competition than ever. However, smart retailers are facing these challenges and actually growing their businesses, and bottom lines, by retaining their most loyal customers. A recent student by Harvard Business School found that a 5% increase in customer retention yields an increase in profits between 25 – 100%.
The key, however, is how to retain these customers without increasing complexity and costs. As a former loyalty consultant at McKinsey & Company, Victor Ho has a keen understanding of the challenge that retailers face and has delivered a product that not only meets those needs, but also does it in a way that works seamlessly within their existing business structure and is frictionless for consumers to adopt. It literally “slides in.”
FiveStars offers consumers a single card that they can use to earn rewards for everything from picking up coffee to getting a massage without the hassle of keeping track of multiple cards. A consumer registers once by just giving their phone number and then simply provides the card to merchants on checkout. And because the company integrates directly and easily with the POS, retailers can be up and running with FiveStars in literally minutes. No extra equipment is required, like iPads or smartphones which add to complexity and decrease adoption. Furthermore, Five Stars allows merchants to track spending habits and better personalize promotions and rewards.
The proof is in the pudding, and the company has already signed up several hundred merchants in its first several months of selling with very little marketing or advertising. They have developed a winning formula and with the new capital will be looking to accelerate their go-to-market activities.
It’s a great product, built by a great team and addressing a huge market. We couldn’t be happier to partner with them as they think big and move fast.
If you found this post useful, follow us @lightspeedvp on Twitter
Do Aspergers, ADD and dyslexia make you more likely to be an entrepreneur? June 3, 2012
Posted by jeremyliew in founders, startups.Tags: founders, startups
4 comments
The Economist in it’s latest edition suggests that business needs people with Asperger’s syndrome, attention-deficit disorder and dyslexia:
Julie Login of Cass Business School surveyed a group of entrepreneurs and found that 35% of them said that they suffered from dyslexia, compared with 10% of the population as a whole and 1% of professional managers. Prominent dyslexics include the founders of Ford, General Electric, IBM and IKEA, not to mention more recent successes such as Charles Schwab (the founder of a stockbroker), Richard Branson (the Virgin Group), John Chambers (Cisco) and Steve Jobs (Apple).
It also gives some data on ADD among entrepreneurs, and more anecdotal info on Aspergers among entrepreneurs, which I think would be the least controversial claim in the tech world. Which founders do you know that have Aspergers, ADD or dyslexia?
Congratulations to the Stanford BASES Final Winners May 23, 2012
Posted by Barry Eggers in Entrepreneur, startups.1 comment so far
Yesterday afternoon, I had the opportunity to join the Business Association of Stanford Entrepreneurial Students, known as BASES, as a judge for its end of the year finale in which student-run start-ups compete for $150K in prizes. This was my third year as a judge. As with prior years, I was impressed by the quality of the presentations and teams this year.
Congratulations to all of the finalists and this year’s winners:
- Calcula Technologies – an innovative treatment of kidney stones that are traditionally determined to be too small to be operable, but that are very painful for patients.
- RAVEL – a legal search platform for lawyers and law students that helps reveal the most important cases, the connections between cases, and the evolution of legal principles over time.
- Wello – an online marketplace that connects consumers with fitness professionals over live, interactive video for group and individual workout sessions.
Lightspeed has been a proud sponsor of BASES for the last few years and continues to be impressed with their impact on the start-up community at Stanford and beyond.
What is the right age to found a company? February 29, 2012
Posted by jeremyliew in founders, startups.Tags: founders, infrastructure, internet, startups, VC
6 comments
I read a story in this weeks economist that surprised me. It claimed that founding new businesses is not just a young persons game, but rather that the average age of a founder of a tech startup was 39.
Research suggests that age may in fact be an advantage for entrepreneurs. Vivek Wadhwa of Singularity University in California studied more than 500 American high-tech and engineering companies with more than $1m in sales. He discovered that the average age of the founders of successful American technology businesses (ie, ones with real revenues) is 39. There were twice as many successful founders over 50 as under 25, and twice as many over 60 as under 20. Dane Stangler of the Kauffman Foundation studied American firms founded in 1996-2007. He found the highest rate of entrepreneurial activity among people aged between 55 and 64—and the lowest rate among the Google generation of 20- to 34-year-olds. The Kauffman Foundation’s most recent study of start-ups discovered that people aged 55 to 64 accounted for nearly 23% of new entrepreneurs in 2010, compared with under 15% in 1996.
There is definitely an availability bias (dominated by people like Mark Zuckerberg and Bill Gates) that leads us to think that tech startup founders drop out of college to start their companies. But I did a quick and informal poll with my partners and found results consistent with Wadhwa’s findings. Roughly 50% of the founders of our current portfolio were in their 30s when they founded their companies, with roughly equal numbers in their 20s to their 40s:
I went one level deeper, and compared the ages of the founders of internet companies to those of infrastructure companies:
Here we start to see a difference – although half of founders in both categories are in their 30s, the remainder tend to skew to their 20s for internet companies and to their 40s for infrastructure companies.
This squares with my intuition more- what do you think?
Nutanix launches and a new era for data center computing is born — No SAN or NAS required! August 16, 2011
Posted by ravimhatre in 2011, Cloud Computing, data, database, datacenter, enterprise infrastructure, Infrastructure, platforms, Portfolio Company blogs, startup, startups, Storage, Uncategorized.Tags: data center, datacenter, nas, san, storage, virtualization, vmware
5 comments
The Nutanix team (ex-Googlers, VMWare, and Asterdata alums) have been quietly working to create the world’s first high-performance appliance that enables IT to deploy a complete data center environment (compute, storage, network) from a single 2U appliance.
The platform also scales to much larger configurations with zero downtime or admin changes and users can run a broard array of mixed workloads from mail/print/file servers to databases to back-office applications without having to make upfront decisions about where or how to allocate their scare hardware resources.
For the first time an IT administrator in a small or mid-sized company or a branch office can plug in his or her virtual data center and be up/running in a matter of minutes.
Some of the most disruptive elements of Nutanix’s technology which enable the customer to avoid expensive SAN and NAS investments typically required for true data center computing are aptly described on company’s blog – http://www.nutanix.com/blog/.
Take a look. We believe this represents the beginning of the next generation in data center computing.
The Anatomy of a Social Product August 2, 2011
Posted by Bipul Sinha in social media, social networks, startups, Uncategorized.9 comments
The social Internet is fundamentally a game changer. Unlike the web-link driven Internet, the social Internet connects people directly to one another and the resulting social graph essentially provides for a brand new, highly scalable distribution mechanism. The early adopters of the Facebook platform such as Zynga leveraged the platform’s social distribution to reach scale relatively quickly. However as the platform is restricting notifications to the users, a number of newer applications are finding it hard to get user traction and sustain engagement. In the competitive world of Facebook and other social platform applications, applications have to be fundamentally social to survive and get user attention. My acid test for an application leveraging social graph – “is the application useless in the absence of the social graph”. A “No” answer indicates a mere social layering on top which is not sufficient.
The Hierarchy of Social Interactions
A social application’s user interaction model should be around discovery and handholding users from “lookers” to “doers”. The discovery is essentially bringing together emotional, impulsive, curiosity, and other inherent psychological needs, and delighting users every time they engage with the application. The discovery aspect of a social application is what brings users back into the application and sustains engagement levels.
The hierarchy of interactions from lookers to doers is core to the discovery mechanism. A well designed social application must provide value to users who are just lookers and make no input. Such users make the majority of an application audience. The next up in the hierarchy is “one click” interactions. With this mechanism a user can vote up or down on any object created by other users. This kind of low-touch interactions help users get over the hurdle by reducing the cognitive dissonance arising out of “what to write or comment”. The next step up is “responding” to a question or comment from other users. This, again, is low hurdle activity since users have the needed context to respond with. Users who ask or comment in the first place are still next level up in the interaction hierarchy because they are dealing with low to no context resulting in higher level of cognitive dissonance. At the top of the hierarchy are users who upload or generate content. The effort needed to generate/upload content and the social approval anxiety make this step the hardest for the users. A successful social application essentially handholds users up the social interaction hierarchy and creates stickiness and high level of user engagement. As a general rule of thumb, the distribution of users in different position on the hierarchy are 80% lookers, 10% clickers, 5% responders, 3% askers and 2% creators.
A social application by its very definition involves social approval, recognition, and emotional fulfillment, and application developers should focus on reducing social approval anxiety and cognitive dissonance by creating an easier path for users to convert from lookers into doers.
Democratization of Entrepreneurship July 23, 2011
Posted by Bipul Sinha in startups.Tags: entrepreneurship, startup
9 comments
The first decade of the new century witnessed a fundamental change in the nature of the technology entrepreneurship. The dramatic reduction in the cost of starting a technology business combined with readily available risk capital has created a near perfect market for anyone with an idea and some risk tolerance to become an entrepreneur. This democratization of entrepreneurship has profound implications not only for the venture capital industry but also for the economic growth and prosperity.
The maturity of the Internet as a platform and the growth of open source projects have given rise to infrastructure-as-a-service providers that allow companies to almost completely eliminate the upfront capital expenditure and pay based on usage of the infrastructure. The entrepreneurs are leveraging the outsourced infrastructure along with Internet based low cost distribution to test and refine business models. The so called “Super Angels” who are a new class of risk capital providers have emerged to support such early stage Internet business model experimentation. In most cases the outcomes of such experiments are determined with less than $1M in invested capital. The successful models then go ahead and raise substantial venture capital to scale the business. What is the most interesting is, unlike the previous generation of technology entrepreneurs who were building infrastructure components of the so called technology stack, this new generation of entrepreneurs don’t need deep domain experience to start web based businesses as vast majority of the new companies are business model innovations with some technology pieces layered in. Further fueling this phenomenon is plenty of early exit opportunities for these companies even if the business model turns out to be not very scalable.
The democratization of entrepreneurship is net positive for the Silicon Valley ecosystem. The reduced barrier to entry and cost of failure have encouraged hordes of new college grads and corporate professionals to start companies. The traditional venture capital market is more efficient than ever because only somewhat proven ideas get further funding to scale the business. The venture firm brand name is not the most significant determinant of deal access especially in early stages due to serendipity factor in the identification of teams and business models. The market is much more of a level playing field for all.
Some people argue that easy access to capital and plenty of early technology/talent exit opportunities would create a culture of “fast flippers” where entrepreneurs would avoid long and hard slog of building large, standalone businesses that made Silicon Valley. Surely, there are well funded startups that look more like lifestyle businesses with no real potential to scale. However, we are early in this cycle and I believe market forces would eventually bring equilibrium.
I am more excited than ever about the pace of innovation and the resulting economic growth and prosperity. The unleashing of communication revolution combined with ubiquitous computing is creating level playing fields for consumer and entrepreneurs alike around the globe. We are indeed living through an age of acceleration where erstwhile temporal distances are getting squeezed. I will write more about it in the future.
The Lightspeed Summer Fellowship Program Explained April 12, 2011
Posted by John Vrionis in 2011, blogging, start-up, startup, startups, Summer Program, Venture Capital.6 comments
There’s been some great discussions recently about the Lightspeed Summer Program (http://news.ycombinator.com/item?id=2380567) and at several of the sessions over the weekend at the Stanford E-Boot Camp (http://bases.stanford.edu/e-bootcamp/ so I thought I’d do a quick post to help answer some of the recurring questions.
Background. I started the program at Lightspeed 6 years ago because as an undergraduate and graduate student I, as well as many of my entrepreneurial classmates, took on “real” internships during the summers in order to pay the bills (rent, gas, beer…). We worked on our startup ideas on nights and weekends out of necessity. When I joined Lightspeed in 2006 and realized that we had the resources to facilitate some number of idea-stage projects, we put together the Summer Program and opened it up to student led teams. Why did a student need to be involved? We had to draw the line somewhere. The program could not be just another entryway for entrepreneurs to pitch Lightspeed. We wanted to target young, entrepreneurial minded people and give them a viable summer alternative to taking that traditional internship.
I know from personal experience just how hard starting a company can be. It’s a BIG DECISION to tackle early in your professional career. Pieces of the program have changed over time, but the GOAL has remained constant since inception and that is simply to give young entrepreneurs the time and resources to fully experience what it is like to start a company.
Purpose. The Lightspeed Summer Program is NOT an incubator, nor was it ever intended to be. We are not looking to fund companies out of the program. Really. I promise. We want people to experience startup life fulltime and have the opportunity to learn if it is something they truly want to do. Is there benefit to Lightspeed? Yes, of course. We hope to build relationships with young, talented entrepreneurs at this stage in their careers. We are in the business of fostering entrepreneurship. We also have a very long term view on what this means. The opportunity to work with bright, energetic people who have ideas about how to change the world is exactly why we do this job in the first place.
Why don’t you ask for equity or a right to invest? It’s funny, people have asked me “What’s the catch?” Or, “It sounds too good to be true, so what am I missing?” I appreciate the genuine skepticism so I want to be as clear as I can on this one. The reasons we don’t require an obligation from the entrepreneurs we accept are simple:
First, we don’t have expectations that the teams we accept will be ready for venture capital during or after completing the program. In fact, I’ve been surprised by the number (12+) that have gone on to receive venture or angel funding.
Second, we look at the program as a way to engage with people at this stage in their careers. If we do a good job and they like working with us, they should want to come back and work together down the road if they want to pursue entrepreneurship. If we don’t do a good job, and they don’t like working with us, well, shame on us(!), but the entrepreneur shouldn’t be obligated to work with Lightspeed.
Evolution. I’ve changed the “rules” of the program over the years to try and make it a better experience. For example: I learned in Year 1 that teams without engineers didn’t accomplish much in the 10 week time frame. Without fulltime “doers” teams ended up with a lot of ideas and power point slides but very few actual results. So we adapted and started requiring that every team have at least one CS or EE major as a way to push teams to have members that could actually build stuff over the summer. Example 2: I learned that what is most helpful to the Fellowship winners in terms of guest speakers and introductions is other young founders who have successfully raised money and angel investors. So I changed our guest speaker lineup and invited fewer attorneys, CFO’s, and recruiters and went with a healthy dose of entrepreneurs, CEO’s and investors. Example 3: Entrepreneurs like lots of free food, so we added more snacks.
If I participate in the program and Lightspeed doesn’t invest, isn’t that a bad signal? This is something I didn’t think about when we first started the program. It’s a very valid concern. The LAST thing I want to do is have a program that creates friction for any entrepreneurs who want to continue to pursue their company after the program. So we made a change. Starting last year, we made a commitment to every team we accept. Lightspeed will invest a minimum of $50k in any Summer Program winner that continues on with a company and is able to pull together a round of at least $500k from other investors. It’s very important to understand that the Lightspeed investment is completely at the entrepreneur’s option. If you don’t want it, don’t take it. But this way, if any investor ever asks, “Is Lightspeed investing?” the answer is “Yes, if we want them to.”
Competition. People often ask or comment about other programs (YC, Angel Pad, etc). I’m thrilled these programs exist and are flourishing. I think the more opportunities out there for young entrepreneurs to try the startup life, the better. We’ve had teams in multiple summer programs in the past and its been great. The one requirement we ask is that teams dont participate in more than one program at the same time.
Resources. The program gives Fellows office space, some funding, VC mentorship (each winning team has a Partner from Lightspeed as a mentor), introductions to founders and angels, and a chance to work on your idea fulltime. I’ve learned that our Fellows also benefit greatly from the camaraderie that emerges from working with other entrepreneurs in a close environment and that these lasting relationships mean a great deal to people.
This program is NOT for people who want a lot of hand holding. As an entrepreneur, I learned you need to be scrappy. The program is designed to give you all the resources you need but ultimately it is best suited for entrepreneurs who just need the chance to make things happen.
Application. We one round for 2012. The deadline for is March 2, 2012 so get them in! Find the app here: http://www.lightspeedvp.com/summerfellowships/
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