No Titles, No Problem: Stackdriver Scores $10M for Cloud Monitoring
Stackdriver. Love the name. Love the concept, though it’s kind of technical. Bear with me.
You know how every Web company seems to run its business on Amazon Web Services or Rackspace? That means every Web company also needs to monitor its IT environment—its application performance, website speed, and so forth—in the public cloud. Or risk being slower than its competitors or, worse, having downtime.
Boston-based Stackdriver is figuring out how to do this kind of cloud monitoring—now with more resources. The 15-month-old company has just raised a $10 million Series B financing round led by new investor Flybridge Capital Partners; general partner Chip Hazard led the round and brings IT expertise from his involvement with companies like MongoDB. Bain Capital Ventures, which led Stackdriver’s A round, also participated in the deal, along with angel investors. The company has raised $15 million to date.
Stackdriver is also coming out of beta trials with some 400 users, and is announcing general availability of its software. The basic idea is to give cloud-based companies an efficient way to monitor and handle the performance of AWS, cloud database systems, and Web server clusters.
“We want to provide visibility for people who are running on AWS,” Stackdriver co-founder Dan Belcher says. “People want more insight around capacity, cost, performance, security, and compliance.”
Belcher recounts that photo-sharing site SmugMug uses Stackdriver as a sort of “sixth man” on its team. The site has an operations group of five people who keep it running, and Stackdriver’s software is the equivalent of an extra person who otherwise would be needed to write custom scripts, analyze data, and maintain various disparate systems. Other customers have discovered anomalies using the startup’s software, and that has “saved them from downtime,” Belcher says.
“If you’re running in the cloud, either you invest more than you thought you would in DevOps [developers and IT], to give you visibility you need, or you play it looser and run the risk of unanticipated downtime,” he says.
It’s all part of a broader migration of IT services to the cloud, which has trailed far behind all the applications running in the wild.
“The old [systems management] solutions are hard to apply to this world,” says Ben Nye, an early Stackdriver investor from Bain Capital Ventures. “What you can’t see or touch is hard to manage.” He adds that this is a “huge new market, and it’s growing fast”—which is music to any VC’s ears.
It’s also been a fast ride for a startup that, as of July 2012, consisted of “me, Izzy, and a whiteboard—and neither of us are engineers,” Belcher says. He’s not the CEO, because there is no CEO (more on that below). He came from e-mail archiving firm Sonian, where he was director of product management, and previously worked at VMware and Microsoft. “Izzy” is Izzy Azeri, his co-founder who came from EMC and VMware, by way of Bain Capital Ventures as an entrepreneur-in-residence.
A key early hire was Phil Jacob, the founder of social-shopping startup StyleFeeder, which was acquired by Time in 2010. In addition to his engineering skills, Jacob “brought discipline to our recruiting process,” Belcher says, “ and helped us weed out more candidates that wouldn’t be a fit.”
Belcher says the culture at Stackdriver is one of transparency and “laid-back intensity.” The startup gets its share of paintball and Formula One racing days, but it also has no job titles. Zero.
“It keeps the team focused on the right thing,” Belcher says. “Instead of, ‘Why don’t I get an office?’ or ‘Why am I not a senior engineer?’ And from a recruiting perspective, it’s a great filter. People who come in and ask about a VP title, it might as well be a revolving door.”
For the record, Belcher works on product and marketing, while Azeri handles sales and back-office duties. (I would imagine the company will need to add a lot more hierarchy as it grows.) Stackdriver has about 25 employees now and expects to hire 20 more across sales and engineering over the next year.
On the eve of his company’s expansion, I asked Belcher what his challenges are and what he worries about. Company structure is one thing. “We have to get the right processes in place and make decision-making more systematic,” he says. The team will also bring in people to take on leading roles in sales and product management (but still no VP titles).
Maybe more important: listening to customers and making the right decisions, he says. “We have to be responsive to customer requests, while also investing in automation and making big bets in customer value long-term.”
He’s talking about balancing the daily business with the need to keep innovating in analytics and intelligence—eventually so the software can do things like automatically recommend a course of action for customers.
It’s hard to see the future, but companies from VMware to Amazon to Rackspace to IBM would do well to pay attention to this one.