Cloudkick Founder Alex Polvi on the Experience of Getting Acquired by Rackspace in Startup Year One

3/31/11Follow @wroush

Alex Polvi is on the tech world’s express elevator. Just a few years ago, the 25-year-old computer science graduate from Oregon State University was a system administrator at Open Source Lab, the home of Linux, Apache, Drupal, and other huge open-source software projects. It’s the place developers around the world depend on to maintain and distribute up-to-date code for these basic Web technologies.

After similar stints at Mozilla and Google, Polvi joined with his Oregon State classmates Dan Di Spaltro and Logan Welliver to see how they could turn their software chops into business gold. So they applied for the winter 2009 term at the Y Combinator venture incubator program, where the trio came up with an idea for cloud computing tools that help companies manage the growing number of applications they run on Amazon’s EC2, GoGrid, and other cloud hosting platforms. In January 2010, their San Francisco-based company, Cloudkick, introduced its paid commercial service. And just 11 months later, the startup was purchased for an undisclosed amount by Rackspace, the San Antonio, TX-based managed hosting and cloud provider.

Nominally, Polvi is still Cloudkick’s CEO, but in effect the startup is now Rackspace’s San Francisco/Silicon Valley outpost, and Polvi is its site leader. I caught up with the animated young entrepreneur Tuesday at the Web 2.0 Expo in San Francisco, and asked him what Cloudkick’s ascent has been like and how he thinks Cloudkick’s services can help Rackspace stand out. (The photo at upper right is from the Rackspace booth at the expo; Polvi is posing with Rackspace’s “fanataguy” logo, a reference to the company’s “fanatical support” tagline.)

Interestingly, Cloudkick wasn’t a fait accompli when Polvi, De Spaltro, and Welliver entered Y Combinator. As Polvi explained to me with self-deprecating humor, the team’s first idea was “Kiva.org for scholarships” and had nothing to do with the cloud or infrastructure management. But Paul Graham and the other Y Combinator founders gently nudged the team to focus on something they actually knew how to build—which Cloudkick’s early investors, including La Jolla, CA-based Avalon Ventures, are probably very happy about, given that they were able to get a return on their investment in less than a year.

Xconomy: What makes Rackspace different from any other hosting or cloud company?

Alex Polvi: The quick answer to that is just service. Rackspace is fundamentally a service company, not just an infrastructure company. There are “rackers” who can help you run your infrastructure, and now with the Cloudkick acquisition, more and more we can help you with actual software services. The reason Rackspace is so well known and differentiated is that. And that results from getting a bunch of people who care about customers. That’s the biggest benefit of being part of Rackspace—the awesome people who are there. I don’t know how they managed to collect so many great people.

X: Just a couple of years ago, Cloudkick was an unknown startup going through the Y Combinator program. How did the company grow and get acquired so fast?

AP: When you do the Y Combinator thing, you have three months to build a product and put it out there. Our product was related to server management. The idea was that these tools haven’t really existed in the cloud. Our jobs before were running servers and managing infrastructure, so we just built the tools we would want to use in SaaS form. Y Combinator is really just a platform to help you get your first round of funding, and when we went out to raise our first round, that was when we … Next Page »

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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