Gaurav Dhillon was one of the great enterprise entrepreneurs of the ‘90s and early 2000s. He founded and ran the premier integration company of the era, Informatica, took it public and built it into the number one company in the market. Informatica is currently worth over $4B.
Ordinarily, we would automatically disqualify an entrepreneur with such a massive financial success from funding, so when he came into pitch us on his new company SnapLogic I was skeptical. At this point, you are probably thinking: “Ben, you are an idiot. Why are you against hiring successful people?” It is a long story, but in summary, one general rule of mine is don’t hire or fund rich people. The reason? Building a technology company is hard. It’s really frackin’ hard. Many of the tasks that you do when building one are no fun. When things go wrong as they always do, it’s no fun at all. Rich people tend to like to work on things that they enjoy, because if they don’t enjoy it, well, they are already rich. When the going gets tough, the rich get going . . . to their vacation homes and their yachts.
As a result, much of the time that I spent evaluating Gaurav’s new company, SnapLogic, was dedicated to analyzing Gaurav’s personal motives. I wanted to know if there was some new force that could be stronger than the strong force of rich-people’s laziness. John Reed, the former CEO of Citigroup once said to me: “Ben, the only reason to start a company is because you have an irrational desire to do so, because it’s not worth the money.” I had to find out if Gaurav was irrational enough to fund. After much investigation, I found Gaurav to be completely irrational—in a good way. Although, Informatica is considered a great success, it isn’t a great success for Gaurav, because he deeply believes that both the idea and his ability to execute it exceed the outcome that he achieved. So much so that our diligence found him working round the clock, running a hyper-intense environment and looking very much like a 20 year old entrepreneur on a mission from God. When my partner Marc asked me whether we should be backing an entrepreneur who is already rich, I replied: “it depends on whether we should believe my beautiful theory or my lying eyes.” He said, “let’s go with your lying eyes.”
Since Gaurav’s first attempt at solving the generalized integration problem, one market change and two changes in his approach have dramatically expanded the size of the target market and the quality of his solution.
The market change: Software as a Service
With the advent of SaaS, applications have become radically easier to both build and adopt. Prior to SaaS applications becoming available, the bottleneck for adopting new software applications was the time required to deploy, update, and adopt the applications. With these costs radically reduced, companies today deploy 10X as many applications as they did just 10 years ago. This explosion of applications creates a strong need for better integration.
The Metaphor King and his breakthrough approach
The value of an integration platform is the number and depth of systems that one can integrate. The challenge is building, maintaining, and distributing integrations for every pair-wise set of every version of every application in the world. In the past, this problem has rendered integration platforms underwhelming and isolated them to the highest-value applications only.
I affectionately refer to Gaurav as the Metaphor King, because he loves to describe everything with a metaphor. Once when we were discussing pricing, he nonchalantly replied with no pause or extra thought: “Yes, we looked at one set of prices and the porridge was too cold, then another and the porridge was too hot, so we are still searching for Goldilocks.” Given his proclivity for metaphors, it shouldn’t be surprising that he solved the explosive pair-wise integration problem with a pair of metaphors. In the first, SnapLogic uses a Federal Express approach to integration. Rather than integrating systems directly, all versions of all products integrate to a canonical format (Memphis for those of you following the metaphor), reducing the number of total integrations from n2 to 2n-1. In the second metaphor, he adopts Apple’s innovative AppStore into the enterprise software world with something that he quite naturally calls the SnapStore. In the SnapStore, SnapLogic, a broad set of 3rd party developers and customers provide integrations from systems such as Salesforce.com and SAP to SnapLogic’s canonical format. SnapLogic then aggressively stress tests, security screens, and quality tests the snaps. Customers can then easily purchase the integrations that they need. Today, only 8 months after launch, the SnapStore has 63 supported snaps representing around 2000 integrations.
The early results for SnapLogic have been remarkable in their diversity. In particular, customers of widely varying technical capabilities, ages, and business models have been keen to deploy SnapLogic. Their early customers range from small, primarily online technology focused shops such as Canonical—makers of Ubuntu Linux—all the way up to diverse, geographically disperse meat and potatoes businesses like OSI Restaurant Partners, owners of Outback Steakhouse (who is quite literally in the meat and potatoes business).
I am proud to announce that we are leading a $10M investment round in SnapLogic and participating in Gaurav Dhillon 2.0.