Startups have little chance of surviving. So why would a large company take the risk of being stranded when buying one's products?
An example of this is Rubrik, a manufacturer of data backup and recovery software based in Palo Alto, California. It is growing so fast that in six quarters since it began selling its product, its private market value soared to $ 1.3 billion, as it won customers from huge incumbents in a $ 50 billion market.
In Rubrik's case, the answer to my question is simple: it offers customers much more money than rivals (I call it a quantum leap). And I have found in many industries - including identity management software, DevOps, application performance monitoring, copy data management and hyperconversion infrastructure (HCI) - that startups are able to offer customers a QVL because the headlines They leave their large bellies exposed due to internally-imposed mandates that offer customers less benefit at a higher price.
The clearest example I've seen of this is at IBM where acquisitions are a substitute for the development of new products and internal policies require IBM to offer customers an uncomfortable package of products that cost customers more money and work less Effectively than the products offered by startups that focus on offering customers the best solution at a lower price.
This comes to mind when considering why Rubrik was able to raise $ 180 million in a D series last month - for a total of $ 292 million in capital in four rounds - at a valuation of $ 1.3 billion. Bipul Sinha explained to me in a conversation on May 1: "We were founded in January 2014 and started selling our product six quarters ago, and since then we have achieved an execution rate of 100 million dollars and we are so efficient that we have not Touched The $ 61 million we took from Vinod Khosla in our C Series round. "
Previously, Sinha was Oracle's manager, working on its core database and from there a partner of venture capital firm Lightspeed, where he liked to put "first money" in companies - such as Nutanix - which was published in September Spent at $ 39 a share and now trades at $ 14.46 only.
Thinking about Nutanix, Sinha made an observation about which Rubrik was built. "[The HCI leader] Nutanix was expanding the distributed systems, but practically nothing happened in the backup and recovery. Also, in 2011 I realized that the cloud would be used by the developers and the company. A company sending data back and forth from the cloud, Rubrik could be this data control aircraft, "Sinha said.
Rubrik has built cloud-compatible backup and recovery software to replace old EMC products from Dell Technologies and Veritas from Carlyle Group in a $ 50 billion market. Rubrik's software can run directly on Amazon's AWS and Microsoft's Azure so customers can use Rubrik to catalog and back up their data on their own computer systems.
This combined approach is valuable to customers and they are buying because they can not get this benefit from the headlines and it saves them money. As Sinha explained, "Customers like the simplicity of a native cloud platform, so they do not need to hire backup and recovery specialists to operate our service, run on Amazon and Azure and premier. EMC execution, which requires the purchase of new hardware and software - from 20% to 50% In addition, our product is designed to minimize the use of platforms like AWS - by automating its service catalogs - to keep costs lower , Products are not. "
