1 00:00:02,160 --> 00:00:05,040 And welcome everyone to another Smart Money Circle episode. 2 00:00:05,080 --> 00:00:07,400 I'm Adam Sarhan. With me today is Gleb Budman 3 00:00:07,400 --> 00:00:11,480 who's the Co founder, CEO and chairman at Backblaze. 4 00:00:11,480 --> 00:00:14,880 Ticker symbol is BLZE Gleb. Thank you so much for taking the 5 00:00:14,880 --> 00:00:16,640 time and welcome to the Smart Money Circle. 6 00:00:17,040 --> 00:00:18,440 Thanks Adam. Good to be here. 7 00:00:18,440 --> 00:00:19,680 Looking forward to the conversation. 8 00:00:20,440 --> 00:00:22,560 So, Gleb, I always like to ask, can you please tell us your 9 00:00:22,560 --> 00:00:24,520 story and how you got to where you are today? 10 00:00:25,720 --> 00:00:29,160 Sure. So I I've been doing this role 11 00:00:29,400 --> 00:00:32,320 for about 17 years. We started the company about 17 12 00:00:32,320 --> 00:00:35,440 years ago and so I was a Co founder of the company. 13 00:00:36,280 --> 00:00:40,160 But I've had basically a trajectory of caring deeply and 14 00:00:40,160 --> 00:00:43,040 being excited about technology and and about business and how 15 00:00:43,040 --> 00:00:48,000 the 2 married together. So before this I worked on two 16 00:00:48,000 --> 00:00:52,440 other tech companies entrepreneurial ventures. 17 00:00:52,720 --> 00:00:57,400 We did an e-mail security company before this one, the 18 00:00:58,320 --> 00:01:00,520 anti spam antivirus, anti phishing. 19 00:01:01,280 --> 00:01:06,520 We raised funding for that one, sold it to another company 20 00:01:06,520 --> 00:01:09,960 called Sonicwall. And that product line actually 21 00:01:10,640 --> 00:01:14,560 might even still be for sale today, but it was for sale years 22 00:01:14,560 --> 00:01:17,160 and years after which I was, I was proud of that. 23 00:01:17,160 --> 00:01:21,840 It continued to be something that provided value to customers 24 00:01:21,840 --> 00:01:24,000 in the fight against spam for many years to come. 25 00:01:24,560 --> 00:01:29,560 Before that worked on another company which was early kind of 26 00:01:29,560 --> 00:01:36,800 machine learning type company. We, we found that there's all 27 00:01:36,800 --> 00:01:41,920 this content out there on the web and yet the search engines 28 00:01:41,920 --> 00:01:46,200 at the time were not ideal in finding that and and bringing it 29 00:01:46,200 --> 00:01:49,600 up. And so we wedged ourselves into 30 00:01:49,600 --> 00:01:55,240 the browser to help you help it learn what you were interested 31 00:01:55,240 --> 00:02:00,560 in and be able to bring those those learnings into your 32 00:02:00,560 --> 00:02:03,680 searches, into your exploration, into your research. 33 00:02:04,200 --> 00:02:08,840 And then, and so that company was started during the crazy.com 34 00:02:09,199 --> 00:02:14,560 days and was acquired by Excited Home, which was one of the large 35 00:02:15,280 --> 00:02:18,320 search and broadband connectivity companies at the 36 00:02:18,320 --> 00:02:20,200 time. So that's kind of the, the more 37 00:02:20,200 --> 00:02:23,960 recent tech journey. But I've, I've been doing some 38 00:02:23,960 --> 00:02:27,280 entrepreneurial something and something with technology pretty 39 00:02:27,280 --> 00:02:30,560 much my entire life. When I was when I was five years 40 00:02:30,560 --> 00:02:37,960 old, I drew a picture for my parents of, of a submarine with 41 00:02:38,480 --> 00:02:40,280 the wires coming out of it and everything. 42 00:02:40,280 --> 00:02:42,200 And they, and they, they said what, what, what's with the 43 00:02:42,200 --> 00:02:43,280 wires? And I was like, well, you have 44 00:02:43,280 --> 00:02:45,360 to breathe underwater. So we need electricity to go 45 00:02:45,360 --> 00:02:48,600 into the water and, you know, create the air for them. 46 00:02:48,760 --> 00:02:51,320 And I'm not sure that any of the physics actually fully worked 47 00:02:51,320 --> 00:02:56,320 out, but but it was just, you know, early passions around what 48 00:02:56,320 --> 00:03:00,280 the possibilities of technology and and marrying that with 49 00:03:00,280 --> 00:03:02,800 business were. Well, I absolutely love it. 50 00:03:02,960 --> 00:03:05,520 And then back Blaze, how'd you get to become, how'd you get the 51 00:03:05,520 --> 00:03:09,040 idea to Co found it and become CEO there and then please tell 52 00:03:09,040 --> 00:03:12,320 us about the company and your unique value propositions. 53 00:03:13,080 --> 00:03:16,560 Sure. So, so I, I feel lucky. 54 00:03:17,080 --> 00:03:20,080 When I was starting a company out of Business School, I ended 55 00:03:20,080 --> 00:03:23,120 up meeting up with some of the people that I started working 56 00:03:23,120 --> 00:03:27,000 with on the first company back in 99.com days. 57 00:03:27,360 --> 00:03:30,760 The some of the people from that company are the same ones that 58 00:03:30,760 --> 00:03:32,400 we did the e-mail security company with. 59 00:03:32,760 --> 00:03:38,640 And one of those people, Brian Wilson was our, was our CTO at 60 00:03:38,640 --> 00:03:46,200 the prior company and he had a friend who had a computer crash 61 00:03:46,240 --> 00:03:50,200 and who called him up and said, you got to help me. 62 00:03:50,880 --> 00:03:54,560 You know, like my computer crashed, I've lost all my data. 63 00:03:54,560 --> 00:03:58,840 You got to help me. And my, you know, former CTO, Co 64 00:03:58,840 --> 00:04:01,640 founder said, no problem, I'll get you in your computer. 65 00:04:01,720 --> 00:04:04,160 We'll get you set up. Where is your backup? 66 00:04:04,640 --> 00:04:07,800 And she starts pounding the table and says, look, what I 67 00:04:07,800 --> 00:04:10,320 don't need now is the lecture. What I need is for you to get my 68 00:04:10,320 --> 00:04:13,280 stuff back. And he's like, well, if you 69 00:04:13,280 --> 00:04:14,840 don't have a backup, I can't help you. 70 00:04:15,320 --> 00:04:19,120 And so he and I started talking about that and said, who doesn't 71 00:04:19,120 --> 00:04:22,160 backup their data? And so we started asking friends 72 00:04:22,160 --> 00:04:26,240 and family and colleagues, and the general answer was nobody 73 00:04:26,240 --> 00:04:29,720 was backing up their data. And we looked at it and said, 74 00:04:30,200 --> 00:04:33,320 everything's going digital, everything's getting laptops, no 75 00:04:33,320 --> 00:04:35,640 one's backing up their data. This is going to be a problem. 76 00:04:36,880 --> 00:04:43,480 And so he and I talked about it and we decided to start backways 77 00:04:43,480 --> 00:04:47,120 together working on solving this problem. 78 00:04:47,560 --> 00:04:50,640 We actually convinced a few of our other people that we worked 79 00:04:50,640 --> 00:04:53,160 with before to join us in that endeavour. 80 00:04:53,600 --> 00:04:59,680 We did something different. So the prior two companies we 81 00:04:59,680 --> 00:05:03,800 raised venture funding from from the beginning for Back Blaze, we 82 00:05:03,800 --> 00:05:08,800 actually said what we really wanted to focus on was what 83 00:05:08,800 --> 00:05:11,760 product do we want to solve and build for customers? 84 00:05:11,760 --> 00:05:15,200 What what use case do they need? We wanted to focus on the 85 00:05:15,200 --> 00:05:17,120 customers and we wanted to focus on the culture. 86 00:05:17,880 --> 00:05:23,160 And to do that we said we're not going to go out and raise 87 00:05:23,360 --> 00:05:26,840 funding, at least not initially. The five of us are going to quit 88 00:05:26,840 --> 00:05:29,200 our jobs. We're going to work together to 89 00:05:29,200 --> 00:05:31,560 do that for one year. We're going to put a little bit 90 00:05:31,560 --> 00:05:34,400 of money and we're not going to take any salary and we're just 91 00:05:34,400 --> 00:05:37,040 going to focus on product, customers, culture. 92 00:05:38,200 --> 00:05:42,680 And as it turned out, we, we went for a year without salary, 93 00:05:42,680 --> 00:05:44,600 then we went for another half a year without salary. 94 00:05:44,600 --> 00:05:46,760 Then we started paying ourselves minimum wage. 95 00:05:46,960 --> 00:05:50,440 We did that for almost a year and we, then we went for almost 96 00:05:50,440 --> 00:05:52,360 another year at 2 times minimum wage. 97 00:05:52,600 --> 00:05:56,440 So it was a turned out to be a much longer journey on the, on 98 00:05:56,440 --> 00:05:59,640 the, you know, not getting a real salary and not getting 99 00:05:59,640 --> 00:06:02,480 compensation front. But we just, we, we, we just 100 00:06:03,200 --> 00:06:06,800 believed in this need like we, we believed we were solving an 101 00:06:06,800 --> 00:06:10,320 important thing. And so that's how we started the 102 00:06:10,320 --> 00:06:12,000 company. It was, it was focused around, 103 00:06:12,000 --> 00:06:16,200 you know, this idea of this one person and, and solving her 104 00:06:16,200 --> 00:06:17,840 problem and where this was all headed. 105 00:06:18,440 --> 00:06:21,960 Initially, we started with the idea that we would build this 106 00:06:21,960 --> 00:06:26,200 backup solution and we would put all of the data on Amazon S3, 107 00:06:26,240 --> 00:06:29,640 which was Amazon's web services storage offering. 108 00:06:29,960 --> 00:06:33,480 We did the math and we realized we're going to lose money on 109 00:06:33,480 --> 00:06:38,200 every single customer. And we said, you know, a hard 110 00:06:38,200 --> 00:06:40,920 drive does not cost that much. It's 100 bucks a TB. 111 00:06:41,280 --> 00:06:45,640 But Amazon is charging orders of magnitude more than that. 112 00:06:46,000 --> 00:06:48,520 And so we said, you know, if we could just figure out how to 113 00:06:48,520 --> 00:06:51,760 take a hard drive and plug it into the Internet, the math 114 00:06:51,760 --> 00:06:55,000 should work. And so we literally started from 115 00:06:55,000 --> 00:06:57,000 first principles trying to figure out how do we attach hard 116 00:06:57,000 --> 00:07:00,240 drives to the Internet. We built our first server out of 117 00:07:00,240 --> 00:07:02,400 plywood and put that in the data center. 118 00:07:02,400 --> 00:07:04,240 And we figured out how to make that work. 119 00:07:04,240 --> 00:07:07,800 And then we cut a steel case version of that before we 120 00:07:07,800 --> 00:07:09,800 started making it in larger volumes. 121 00:07:10,000 --> 00:07:13,160 So we were literally building this cloud storage 122 00:07:13,160 --> 00:07:15,920 infrastructure for our backup service. 123 00:07:16,280 --> 00:07:19,960 And in order to just make it possible, we did that for a 124 00:07:19,960 --> 00:07:22,880 while. Then the consumers who started 125 00:07:22,880 --> 00:07:26,360 using our consumer backup service started coming to us and 126 00:07:26,360 --> 00:07:31,080 saying, OK, look, I use you at home, but I'm also the IT person 127 00:07:31,120 --> 00:07:33,000 for my company. And I'm trying to figure out why 128 00:07:33,000 --> 00:07:36,240 I have a better backup product at home than I have for my 129 00:07:36,240 --> 00:07:38,160 company. Let me use it at the company. 130 00:07:38,160 --> 00:07:42,440 So we started expanding into supporting organizations and 131 00:07:42,440 --> 00:07:46,760 backing up all their laptops and desktops from there. 132 00:07:46,800 --> 00:07:49,360 The next thing that happened was we had the IT people come to us 133 00:07:49,360 --> 00:07:53,560 and say, look, I use you to back up all my company's laptops and 134 00:07:53,560 --> 00:07:57,960 desktops, but I have all these other storage needs and let me 135 00:07:57,960 --> 00:08:00,040 have access to your actual storage platform. 136 00:08:00,400 --> 00:08:06,400 So we launched a service called Backblaze B2 and that became 137 00:08:06,400 --> 00:08:09,640 this cloud storage platform competing with Amazon and Google 138 00:08:09,640 --> 00:08:14,920 and Microsoft. And we now serve about 100,000 139 00:08:14,920 --> 00:08:17,800 customers around the world on that platform. 140 00:08:18,160 --> 00:08:23,080 We we service not only the backup type use cases, but we 141 00:08:23,080 --> 00:08:26,920 also help people with their media production work flows and 142 00:08:26,920 --> 00:08:29,160 their application storage use cases. 143 00:08:29,440 --> 00:08:32,840 And now increasingly with all of the AI use cases. 144 00:08:33,400 --> 00:08:36,960 So we believe we are the ideal storage platform, cloud storage 145 00:08:36,960 --> 00:08:43,080 platform for the all of the AI use cases out there because you 146 00:08:43,080 --> 00:08:45,880 need access to all the GPUs wherever they are. 147 00:08:46,240 --> 00:08:49,360 And we enable that with a really high performance storage 148 00:08:49,400 --> 00:08:52,920 platform that's durable, that's affordable and that gives you 149 00:08:53,080 --> 00:08:55,480 Open Access to all these locations. 150 00:08:55,920 --> 00:09:00,000 So that's the the journey that we were on starting from that 151 00:09:00,000 --> 00:09:01,920 initial need to where we are today. 152 00:09:01,920 --> 00:09:05,640 Today we have in total about half a million customers around 153 00:09:05,640 --> 00:09:11,760 the world in 175 countries. We store about 5 exabytes of 154 00:09:11,880 --> 00:09:17,280 data, that's GB, TB, petabyte, exabyte. 155 00:09:17,280 --> 00:09:19,800 Each is a factor of 1000 bigger than the prior. 156 00:09:20,000 --> 00:09:24,440 Just a lot of data for a lot of customers and, you know, 157 00:09:24,440 --> 00:09:27,440 increasingly supporting all of their customers with all these 158 00:09:27,520 --> 00:09:30,480 AI use cases. Wow, what a remarkable story. 159 00:09:30,480 --> 00:09:33,200 Congratulations on the success. I love the fact that you found 160 00:09:33,200 --> 00:09:35,920 the need a problem and you've came up with a solution for it 161 00:09:36,280 --> 00:09:39,160 way back when and you stayed with it even though you didn't 162 00:09:39,160 --> 00:09:42,600 have the, the salary. And you know you, you did it the 163 00:09:42,600 --> 00:09:45,280 right way, so to speak. And, and it's just grown and 164 00:09:45,280 --> 00:09:46,640 grown and grown. So clearly the market is 165 00:09:46,640 --> 00:09:48,200 rewarding you. Let me ask you a question that I 166 00:09:48,200 --> 00:09:49,600 know comes up a lot from investors. 167 00:09:49,760 --> 00:09:53,440 What makes you different from the other cloud companies and 168 00:09:53,440 --> 00:09:55,080 some of the competitive advantages please? 169 00:09:55,840 --> 00:09:58,120 Yeah, it's a good question, especially with Amazon and 170 00:09:58,120 --> 00:10:01,960 Google and Microsoft, right? So we get the question like, but 171 00:10:02,000 --> 00:10:04,680 you know, there are these huge, huge companies, you know, why do 172 00:10:04,680 --> 00:10:08,440 you exist? And what I will say is they do 173 00:10:08,440 --> 00:10:13,760 200 different things. We focus on cloud storage and we 174 00:10:13,760 --> 00:10:20,320 do a great job on that area. And so just the cloud storage 175 00:10:20,320 --> 00:10:24,960 market alone is about $100 billion, according to IDC, 176 00:10:25,120 --> 00:10:27,840 right? And so it's a big market that 177 00:10:27,840 --> 00:10:29,920 needs a lot of focus to get done right. 178 00:10:30,360 --> 00:10:36,440 Our cloud storage platform is about 1/5 the price point of 179 00:10:36,520 --> 00:10:40,600 those providers. We also offer free egress, and 180 00:10:40,600 --> 00:10:44,440 egress is important if you don't want to be locked inside of the 181 00:10:44,440 --> 00:10:46,480 walled garden of one of these providers. 182 00:10:46,760 --> 00:10:49,320 You need your data to be able to flow other places. 183 00:10:49,320 --> 00:10:51,800 They charge you a tremendous amount to get your data out, 184 00:10:52,880 --> 00:10:58,000 especially in in our AI world today, getting your data out is 185 00:10:58,360 --> 00:11:01,880 increasingly important because you want to be able to use it 186 00:11:01,880 --> 00:11:05,080 with what the GP, us or the AI services that are available 187 00:11:05,080 --> 00:11:09,680 wherever they happen to be. And so we provide a highly 188 00:11:09,680 --> 00:11:14,360 durable and available platform like they do, but we provide it 189 00:11:14,360 --> 00:11:19,200 at a dramatically lower cost with free egress, with often 190 00:11:19,240 --> 00:11:25,440 higher performance than their platforms and the gift and 191 00:11:25,440 --> 00:11:28,640 giving you access to all the places you want your data to go. 192 00:11:29,560 --> 00:11:31,400 Wow, OK, I love that. So it's almost like a doctor, a 193 00:11:31,400 --> 00:11:33,960 generalist makes money, but a specialist makes, you know, a 194 00:11:33,960 --> 00:11:35,840 lot more money. So you're specializing in that. 195 00:11:35,840 --> 00:11:37,360 Cloud storage makes perfect sense. 196 00:11:37,760 --> 00:11:39,880 OK, go ahead. Next to shift the conversation a 197 00:11:39,880 --> 00:11:42,040 little bit, some timeless advice, which is some of my 198 00:11:42,040 --> 00:11:44,800 favorite parts of the show. First question, let's talk about 199 00:11:44,800 --> 00:11:46,840 risk management. How do you handle risk and what 200 00:11:46,840 --> 00:11:49,040 are some mistakes you see people make with respect to risk 201 00:11:49,040 --> 00:11:53,000 management? So what I will say is, you know, 202 00:11:53,000 --> 00:11:56,680 now as a public company, we have a formal risk management 203 00:11:56,680 --> 00:11:59,320 process, we have an enterprise risk management process. 204 00:11:59,360 --> 00:12:04,560 And the way that that process goes is we do we have an 205 00:12:04,560 --> 00:12:08,040 evaluation of risks. So first we think through all 206 00:12:08,040 --> 00:12:10,840 the different kinds of risks that are out there, then we rank 207 00:12:10,840 --> 00:12:14,480 them risk potential and risk impact and then we think through 208 00:12:14,480 --> 00:12:16,680 the mitigation strategy. So that is, you know, there's a 209 00:12:16,680 --> 00:12:19,840 formal risk management process that's, you know, robust and 210 00:12:19,840 --> 00:12:22,840 done. What I will say is that I think 211 00:12:22,840 --> 00:12:30,120 one of the things that people sometimes miss is they actually 212 00:12:30,120 --> 00:12:33,600 miss the risk of addressing the risk. 213 00:12:34,200 --> 00:12:37,440 Nice. And what I mean by that is 214 00:12:37,440 --> 00:12:39,240 sometimes we go, oh, that's a risk. 215 00:12:39,520 --> 00:12:41,960 And therefore we need to do the following things. 216 00:12:41,960 --> 00:12:45,760 And a lot of times the the way that we address risks are don't 217 00:12:45,760 --> 00:12:50,080 do something, slow something down, put in place policies to 218 00:12:50,080 --> 00:12:55,680 prevent it and basically avoid the area of thing that causes 219 00:12:55,680 --> 00:12:57,880 you risk. But business is risk. 220 00:13:00,040 --> 00:13:04,160 And so, you know, I think AI is a great example of this, right? 221 00:13:04,920 --> 00:13:10,160 AI is this absolutely revolutionary technology that is 222 00:13:10,200 --> 00:13:12,200 going to change everything about business. 223 00:13:12,640 --> 00:13:16,320 And a lot of businesses are looking at it and going, What we 224 00:13:16,320 --> 00:13:20,640 need to do is protect ourselves from the risks of AI. 225 00:13:20,880 --> 00:13:24,200 So we need to make sure our employees don't use it in the 226 00:13:24,200 --> 00:13:25,920 wrong ways. We need to make sure that the 227 00:13:26,000 --> 00:13:28,560 the the models don't get access to our data. 228 00:13:28,560 --> 00:13:31,920 We need to make sure of all of these ways of protecting from 229 00:13:31,920 --> 00:13:35,760 the risks of AI. That's not unreasonable, right? 230 00:13:35,960 --> 00:13:38,360 Especially the public company, we have to do those kinds of 231 00:13:38,360 --> 00:13:43,080 things, but you it has to. But it's an even bigger risk to 232 00:13:43,080 --> 00:13:47,680 not adopt AI and not adopt it rapidly and not go after that 233 00:13:47,680 --> 00:13:53,400 opportunity because the risk there is obsolescence, right? 234 00:13:53,400 --> 00:13:57,640 And and so I think we have a very robust process for managing 235 00:13:57,640 --> 00:14:03,520 risk, but it's also really important to focus on not over 236 00:14:03,520 --> 00:14:08,120 addressing the risk and and lose the benefits of those things as 237 00:14:08,120 --> 00:14:09,440 well. Yeah, I know. 238 00:14:09,440 --> 00:14:11,600 That makes perfect sense. I love that you're looking at a 239 00:14:11,600 --> 00:14:13,480 holistic view of risk and business itself. 240 00:14:13,480 --> 00:14:15,400 Is risk life? Is risk also crossing the 241 00:14:15,400 --> 00:14:16,800 street, right? So, yeah. 242 00:14:16,800 --> 00:14:19,000 OK, perfect. Next question for you. 243 00:14:19,000 --> 00:14:21,160 What are some timeless lessons that you've learned along the 244 00:14:21,160 --> 00:14:22,760 way that you'd like to share with the audience? 245 00:14:24,120 --> 00:14:27,120 So you know, a funny 1 is just don't run out of cash. 246 00:14:29,280 --> 00:14:37,160 You know, so much of start-ups are focused on growth and people 247 00:14:37,160 --> 00:14:41,880 talk about revenue and revenue growth is absolutely important. 248 00:14:41,880 --> 00:14:46,280 But you know what few companies go out of business because they, 249 00:14:46,480 --> 00:14:48,080 their revenue doesn't grow fast enough. 250 00:14:48,320 --> 00:14:50,600 They run out, they go out of business because they run out of 251 00:14:50,600 --> 00:14:56,840 cash. So I think we we were very we 252 00:14:56,840 --> 00:14:59,240 had very, very little cash for many, many years because we are 253 00:14:59,240 --> 00:15:03,680 a bootstrap company and we always had basically $1.00 in 254 00:15:03,680 --> 00:15:07,120 the bank account. But you know, we were very 255 00:15:07,120 --> 00:15:11,360 focused on building the business in a sustainable way, right and 256 00:15:11,360 --> 00:15:16,400 focusing on having it so that we had the ability to play again 257 00:15:16,400 --> 00:15:20,400 tomorrow. And so I think that that is just 258 00:15:20,400 --> 00:15:24,000 a concept, right. And a lot of the way that 259 00:15:24,080 --> 00:15:27,680 technology companies especially are designed and the whole 260 00:15:27,680 --> 00:15:33,240 venture industry is designed is raise money for the next 18 261 00:15:33,240 --> 00:15:35,680 months. Run at that wall as fast as you 262 00:15:35,680 --> 00:15:38,600 can with the idea that you're going to run out of money at 263 00:15:38,600 --> 00:15:41,880 that 18 month marker. And you're either going to raise 264 00:15:41,880 --> 00:15:43,640 another round or you're going to go out of business. 265 00:15:44,560 --> 00:15:48,400 And there are some advantages of that, but those advantages tend 266 00:15:48,400 --> 00:15:52,360 to be for the VCs because they have a portfolio of companies. 267 00:15:52,600 --> 00:15:56,160 If you're an entrepreneur, you actually have this company that 268 00:15:56,160 --> 00:15:59,040 you are trying to make successful and so you have to 269 00:15:59,040 --> 00:16:02,240 balance that to not run out of cash. 270 00:16:02,880 --> 00:16:05,080 Yeah, I I love that. I think that's absolutely gold. 271 00:16:05,080 --> 00:16:07,880 So thank you for sharing that. I How about the other side of 272 00:16:07,880 --> 00:16:10,520 that timeless mistakes either you've made you see other people 273 00:16:10,520 --> 00:16:12,680 make besides running out of money that you'd like to share 274 00:16:12,680 --> 00:16:16,760 with the audience. So I, I think a mistake that 275 00:16:17,680 --> 00:16:22,400 often people make in, in at least the kind of Silicon Valley 276 00:16:22,400 --> 00:16:27,000 area is believing that you have to raise funding. 277 00:16:28,920 --> 00:16:32,400 Most entrepreneurs in the Bay Area seem to have this belief 278 00:16:32,840 --> 00:16:36,960 that the first thing they need to do is raise funding and the 279 00:16:36,960 --> 00:16:40,040 second thing is figure out what they're going to build, right. 280 00:16:41,440 --> 00:16:46,240 And, and so, you know, because of the whole venture capital 281 00:16:46,240 --> 00:16:50,400 industry that the TechCrunch articles that everything success 282 00:16:50,400 --> 00:16:55,120 is raising funding. And, and the thing with raising 283 00:16:55,120 --> 00:17:01,280 funding is it is a means to an end for a, for the types of 284 00:17:01,280 --> 00:17:04,720 businesses where raising funding is the right answer. 285 00:17:06,400 --> 00:17:09,319 And that's not for all businesses and that's not at all 286 00:17:09,319 --> 00:17:13,319 times. So we bootstrapped for many, 287 00:17:13,319 --> 00:17:15,200 many years and that was a choice. 288 00:17:15,920 --> 00:17:19,640 And by bootstrapping that allowed a lot of benefits. 289 00:17:20,040 --> 00:17:23,079 Number one, it allowed us to focus on the business, not on 290 00:17:23,079 --> 00:17:29,200 raising funding #2 everybody that was involved was aligned 291 00:17:29,200 --> 00:17:32,400 around the success of the business as opposed to having 292 00:17:32,440 --> 00:17:36,080 what is sometimes can be misalignment with with 293 00:17:36,080 --> 00:17:40,760 investors, right? And it also meant that we had 294 00:17:40,760 --> 00:17:44,360 more control of our destiny and it meant that we didn't give up 295 00:17:44,440 --> 00:17:48,680 as much of the equity. So there are certain businesses 296 00:17:48,680 --> 00:17:52,480 where raising funding is absolutely critical or the right 297 00:17:52,480 --> 00:17:54,560 decision. But I think in Silicon Valley 298 00:17:54,560 --> 00:17:58,800 all too often it's viewed as the only path, right. 299 00:17:59,240 --> 00:18:06,000 And the a corollary I would say to that one is believing that 300 00:18:06,000 --> 00:18:13,400 success is being acquired. So in Silicon Valley, so much of 301 00:18:13,400 --> 00:18:16,720 the belief is how do I get build a business that's going to get 302 00:18:16,720 --> 00:18:21,200 acquired. And you know, having been 303 00:18:21,200 --> 00:18:26,080 through two acquisitions prior to backways, what I would say is 304 00:18:26,240 --> 00:18:30,440 there are there are some nice things about being acquired, but 305 00:18:30,680 --> 00:18:35,120 the first company that we sold was acquired by Excite at home. 306 00:18:35,600 --> 00:18:39,120 Excite at Home went out of business and so they took 307 00:18:39,200 --> 00:18:44,200 everything that we had built and it vaporized out of existence. 308 00:18:44,800 --> 00:18:50,640 The second company that was acquired they that product line 309 00:18:50,640 --> 00:18:53,480 like I said, still still was for sale for a while after which is 310 00:18:53,480 --> 00:18:57,400 great but it it you know they they moved all the people into 311 00:18:57,400 --> 00:18:58,680 all the different groups and departments. 312 00:18:59,000 --> 00:19:03,120 It was no longer the same thing. And so with, with Backlaze, one 313 00:19:03,120 --> 00:19:07,040 of the things that we said at the beginning was, you know, we, 314 00:19:07,760 --> 00:19:10,600 we may end up in a direction where the company gets acquired. 315 00:19:10,600 --> 00:19:15,520 That might be a possible outcome, but the, there are 316 00:19:15,520 --> 00:19:17,400 other possible outcomes. It could be a company that we 317 00:19:17,400 --> 00:19:19,200 just run forever as a private company. 318 00:19:19,600 --> 00:19:21,240 It could be a company that we take public. 319 00:19:22,040 --> 00:19:24,960 You know, there are other directions. 320 00:19:25,040 --> 00:19:28,360 And if you're going to put blood, sweat and tears into 321 00:19:28,360 --> 00:19:31,400 something that you are passionate about for years on 322 00:19:31,400 --> 00:19:37,640 end, being acquired is the end of that existence, right? 323 00:19:38,040 --> 00:19:42,320 And so part of the reason for us decided to take back was public 324 00:19:42,600 --> 00:19:46,560 was we we wanted to establish that this is a company that's 325 00:19:46,560 --> 00:19:48,800 going to be here for the long term and you can trust us with 326 00:19:48,800 --> 00:19:51,720 your cloud infrastructure. Part of it was that we wanted to 327 00:19:51,720 --> 00:19:54,360 make sure that people had some liquidity and ability to flow 328 00:19:54,360 --> 00:19:57,280 the flexibility there. Part of it was to raise the 329 00:19:57,280 --> 00:20:02,080 additional capital to invest. But it was also this idea that, 330 00:20:02,240 --> 00:20:06,880 you know, we had spent 15 years. Being passionate about the 331 00:20:06,880 --> 00:20:09,920 customers and the employees and the partnerships and the things 332 00:20:09,920 --> 00:20:15,000 that we were building, and if the company gets acquired, so 333 00:20:15,000 --> 00:20:17,920 much of that just potentially vaporizes. 334 00:20:18,680 --> 00:20:20,760 Yeah, I love what you're saying. It almost reminds me a little 335 00:20:20,760 --> 00:20:22,720 about the go back a little bit with the money. 336 00:20:22,720 --> 00:20:26,080 So people in Silicon Valley specifically where you are only 337 00:20:26,080 --> 00:20:28,720 focused on raising money and then like you said, 18 months 338 00:20:28,720 --> 00:20:30,320 money runs out a money, money, money. 339 00:20:30,360 --> 00:20:33,360 And it just scrambled eggs or brain as you're saying the same 340 00:20:33,360 --> 00:20:35,280 thing here where it's like, no, hold on a second pause. 341 00:20:35,480 --> 00:20:37,640 It's not about the acquisition. You know, Warren Buffett has a 342 00:20:37,640 --> 00:20:39,240 great line. He goes, you know, once you have 343 00:20:39,240 --> 00:20:43,680 a great business, never sell it. So I fully, fully understand 344 00:20:43,680 --> 00:20:46,960 what you're saying. OK, let's talk about leadership. 345 00:20:47,040 --> 00:20:50,440 As the chairman of the board and CEO and founder and so on and so 346 00:20:50,440 --> 00:20:53,320 Co founder so on and so forth. What makes a great leader, and 347 00:20:53,320 --> 00:20:55,200 what are some lessons you've learned about leadership that 348 00:20:55,200 --> 00:20:56,520 you'd like to share with the audience? 349 00:20:58,600 --> 00:21:03,120 So what I would say is I, you know, different leaders I think 350 00:21:03,120 --> 00:21:06,560 have different value and different companies build 351 00:21:06,560 --> 00:21:09,960 different cultures. And I think companies can be 352 00:21:09,960 --> 00:21:13,360 successful with very different kinds of leaders as as I think 353 00:21:13,360 --> 00:21:17,440 we've all seen and one of the things that I've learned is that 354 00:21:19,040 --> 00:21:21,800 the company needed different kinds of leadership from me at 355 00:21:21,800 --> 00:21:27,840 different points. And that is that's actually 356 00:21:27,840 --> 00:21:31,560 been, I would say somewhat challenging because, you know, I 357 00:21:31,600 --> 00:21:34,640 think we generally speaking, we all are whoever we are. 358 00:21:35,400 --> 00:21:40,880 And so early on, there were five of us that started the company 359 00:21:40,880 --> 00:21:43,560 together. We were very collaborative. 360 00:21:43,800 --> 00:21:47,520 We were in person sitting originally in one room together. 361 00:21:47,960 --> 00:21:55,360 And the way that the way that I engaged was a we're all in this 362 00:21:55,360 --> 00:21:57,000 together. We're going to make these 363 00:21:57,040 --> 00:21:58,720 decisions collaboratively together. 364 00:21:59,240 --> 00:22:02,920 And you know, we'll, we'll vote and we'll figure things out. 365 00:22:04,520 --> 00:22:10,040 And over time, the company grew. There were more people that we 366 00:22:10,040 --> 00:22:15,840 worked on things in parallel. We had people who came in who 367 00:22:15,920 --> 00:22:19,680 we've never worked with before. They were the, the company 368 00:22:19,680 --> 00:22:24,760 changed. And with that, like I needed to 369 00:22:24,760 --> 00:22:27,640 change because in part we needed to change the way we were 370 00:22:27,640 --> 00:22:33,880 operating as an organization. And so it became more focused on 371 00:22:34,200 --> 00:22:37,240 rather than collaborative decision making, which works for 372 00:22:37,240 --> 00:22:42,400 a team of 5 or 10 to a, a path of how do we make decisions 373 00:22:42,720 --> 00:22:46,880 where we empower individuals at different parts of the 374 00:22:46,880 --> 00:22:49,800 organization to own decisions. And how do we make sure that 375 00:22:49,800 --> 00:22:54,040 they know what decisions they can make and what decisions they 376 00:22:54,040 --> 00:22:57,480 have to engage others in making? And how do they collect the 377 00:22:57,480 --> 00:22:59,480 information they need to make a good decision? 378 00:22:59,880 --> 00:23:04,360 Right. Early on, I remember hearing one 379 00:23:04,360 --> 00:23:10,360 of our employees said, hey, you know, I'm trying to decide what 380 00:23:10,360 --> 00:23:13,040 color T-shirt we should get for this event. 381 00:23:13,040 --> 00:23:17,440 And I'm like, great. And she said, well, I'm waiting 382 00:23:17,440 --> 00:23:19,320 until Monday to make that decision. 383 00:23:19,320 --> 00:23:21,000 And I'm like, what happens on Monday? 384 00:23:21,080 --> 00:23:23,400 And she said, well, you know, you and the other founders are 385 00:23:23,400 --> 00:23:26,920 meeting and so I'm waiting for that meeting so you guys can 386 00:23:26,920 --> 00:23:29,800 decide on the color. And I'm like, you have to be 387 00:23:29,800 --> 00:23:33,600 kidding me. Like we are the blocker for a 388 00:23:33,600 --> 00:23:38,040 decision for a week on what color T-shirt to make, like 389 00:23:38,600 --> 00:23:42,200 something's broken, right? And so it was just, there was it 390 00:23:42,200 --> 00:23:44,680 was a light bulb moment for me of saying we're now at a 391 00:23:44,680 --> 00:23:47,000 different phase. We need to make sure people know 392 00:23:47,200 --> 00:23:50,200 you can make those decisions. You can make these decisions. 393 00:23:50,400 --> 00:23:53,680 You can go off and and spend that amount of budget. 394 00:23:54,400 --> 00:24:01,000 Don't wait for me or for us to to, to be a, a a point in that. 395 00:24:01,960 --> 00:24:04,400 I love that I've interviewed over 250 people. 396 00:24:04,400 --> 00:24:06,560 Glad I think you're the first person when I asked that 397 00:24:06,560 --> 00:24:08,920 specific question about leadership that speaks about 398 00:24:08,920 --> 00:24:11,160 shifting gears almost where sometimes you've got to be this 399 00:24:11,160 --> 00:24:12,920 type of leader, sometimes you have to be that. 400 00:24:12,920 --> 00:24:15,440 You have to be able to adapt and grow, which I think is is 401 00:24:15,440 --> 00:24:17,240 absolutely brilliant. So thank you for bringing that 402 00:24:17,240 --> 00:24:19,160 up because that's really, really, really powerful. 403 00:24:20,080 --> 00:24:22,960 So next question, adversity being successful, we've got to 404 00:24:22,960 --> 00:24:25,000 handle adversity. So how do you handle adversity? 405 00:24:25,000 --> 00:24:26,960 And what are some obstacles you had to overcome that you'd like 406 00:24:26,960 --> 00:24:33,920 to share? So I, I would say one of my 407 00:24:33,920 --> 00:24:40,920 stronger suits is, is steadiness, which, you know, I 408 00:24:40,920 --> 00:24:44,320 think a lot of times people talk about resilience and it's, it's 409 00:24:44,320 --> 00:24:46,320 maybe a little bit of resilience, but I would, I 410 00:24:46,360 --> 00:24:48,480 would, I would say it's slightly different than that. 411 00:24:48,480 --> 00:24:54,400 It, I, I tend to be calm through things. 412 00:24:55,400 --> 00:24:59,480 And that's just, I don't know if that's biological or what, but 413 00:24:59,920 --> 00:25:03,040 that, that's been the way I've been long before I was ever 414 00:25:03,080 --> 00:25:05,480 ACEO. And I think that that has been 415 00:25:05,480 --> 00:25:10,400 helpful because sometimes things happen and for the most part I'm 416 00:25:10,400 --> 00:25:13,440 like, it's OK, we will figure it out. 417 00:25:13,480 --> 00:25:15,040 We will take one step in front of the other. 418 00:25:15,480 --> 00:25:18,760 And you know, I think fundamental, I, I think of 419 00:25:18,760 --> 00:25:23,760 myself as a pragmatic optimist, I generally believe the future 420 00:25:23,760 --> 00:25:27,600 is going to be better than the present or the past and that we 421 00:25:27,600 --> 00:25:32,640 have the ability to make it so. And not from a Pollyanna 422 00:25:32,640 --> 00:25:36,280 perspective, but just from a, if we try to make good decisions 423 00:25:36,280 --> 00:25:40,200 and we keep taking one step forward, we will keep improving 424 00:25:40,200 --> 00:25:42,760 things. And so that's just from, I guess 425 00:25:42,800 --> 00:25:46,520 an approach perspective. I'll, I'll tell you one crazy 426 00:25:46,520 --> 00:25:51,880 story. So this was 10 ish years ago 427 00:25:51,880 --> 00:25:55,520 when then almost 15 probably. So we have been building the 428 00:25:55,520 --> 00:25:59,360 company for years, bootstrapped and like I said, $1.00 in the 429 00:25:59,360 --> 00:26:01,760 bank account. And you know, as a cloud storage 430 00:26:01,760 --> 00:26:06,680 company, we buy a lot of hard drives and you know, we would 431 00:26:06,680 --> 00:26:09,280 think about our risks. There's a risk that we may not 432 00:26:09,280 --> 00:26:10,760 be able to hire the right people with. 433 00:26:10,760 --> 00:26:12,680 There's a risk that we may not find customers. 434 00:26:12,680 --> 00:26:16,000 There's a risk that, you know, we're not going to be able to 435 00:26:16,160 --> 00:26:18,480 have enough money. Like there's, there's a variety 436 00:26:18,480 --> 00:26:22,160 of risks, right. One risk we've never 437 00:26:22,440 --> 00:26:27,280 contemplated was the risk of a flood in Thailand. 438 00:26:29,600 --> 00:26:32,880 And you know, we didn't have customers in Taiwan, we didn't 439 00:26:32,880 --> 00:26:35,840 have partners in Taiwan. There was, I mean, what? 440 00:26:36,520 --> 00:26:40,160 But it was one of the biggest risks in the entire history of 441 00:26:40,160 --> 00:26:43,240 the company. And what happened was there was 442 00:26:43,240 --> 00:26:46,640 this flood in Taiwan. And it turned out that hard 443 00:26:46,640 --> 00:26:50,560 drives, while they are built globally in lots of places, have 444 00:26:50,560 --> 00:26:53,640 this area of Thailand where they build certain components that 445 00:26:53,640 --> 00:26:55,560 are used in most of the hard drives out there. 446 00:26:56,240 --> 00:27:02,240 And the factory was flooded. And so all of a sudden you 447 00:27:02,240 --> 00:27:07,280 couldn't buy hard drives. Those hard drives cost hundreds 448 00:27:07,280 --> 00:27:08,960 and hundreds of dollars more than normal. 449 00:27:09,520 --> 00:27:13,040 And as a bootstrap company buying 1000 hard drives a month, 450 00:27:13,400 --> 00:27:16,920 we looked at it and said, Oh my God, what are we going to do? 451 00:27:16,920 --> 00:27:21,120 We can't afford to pay three times the price for all these 452 00:27:21,120 --> 00:27:23,760 hard drives. And at the time there were 453 00:27:23,760 --> 00:27:28,000 twelve of us and we said, what are we going to do? 454 00:27:28,280 --> 00:27:32,800 So one of the things that we noticed and, and, and by the 455 00:27:32,800 --> 00:27:34,920 way, so we, we, we, you know, our first thing was let's 456 00:27:34,920 --> 00:27:36,680 brainstorm ideas. What do we, what could we 457 00:27:36,680 --> 00:27:39,800 possibly try to do? Well, option one was we have a 458 00:27:39,800 --> 00:27:42,400 recurring business. Maybe we, we raise prices on our 459 00:27:42,400 --> 00:27:44,160 customers. We didn't want to do that. 460 00:27:44,160 --> 00:27:47,000 That's not great. But you know, if to survive, 461 00:27:47,000 --> 00:27:52,520 that was a choice. Option 2 was we, we had a blog 462 00:27:52,520 --> 00:27:55,000 that was really popular and we said, you know what, maybe we'll 463 00:27:55,000 --> 00:27:58,640 put a virtual tip jar and say, Hey, you like us, kick in a few 464 00:27:58,640 --> 00:28:03,480 bucks, you know, But you know, the, the core thing was like, is 465 00:28:03,480 --> 00:28:06,280 there any way we can keep buying hard drives at a reasonable 466 00:28:06,280 --> 00:28:07,640 price? So one of the things that we 467 00:28:07,640 --> 00:28:12,360 found was that while these enterprise hard drives that we 468 00:28:12,360 --> 00:28:17,360 were buying were 3-4 times the price, the consumer hard drives, 469 00:28:17,360 --> 00:28:20,240 the ones that you would go to the store and you would buy and 470 00:28:20,240 --> 00:28:24,320 you plug in as a USB hard drive, those only were maybe 25% more 471 00:28:24,320 --> 00:28:27,120 expensive. And so it's, well, that's 472 00:28:27,160 --> 00:28:28,880 interesting. So we bought a few of those hard 473 00:28:28,880 --> 00:28:31,880 drives and we cracked them open like shucking them like a heart, 474 00:28:31,880 --> 00:28:35,520 like a oyster. And we looked like it's the same 475 00:28:35,520 --> 00:28:39,360 drive, right. And so we're, I don't know why, 476 00:28:39,520 --> 00:28:43,080 but for whatever reason, those drives are not as expensive as 477 00:28:43,080 --> 00:28:46,040 the, the enterprises, which is weird because they take the same 478 00:28:46,040 --> 00:28:49,080 drive, wrap it in plastic, stick a power supply on it, put a 479 00:28:49,080 --> 00:28:51,880 manual, put it in the box and sell it at retail for less. 480 00:28:52,440 --> 00:28:55,920 And we said, OK, all we need to do now is buy 1000 of these 481 00:28:55,920 --> 00:28:59,240 retail drives a month, crack them all open like like oysters 482 00:28:59,240 --> 00:29:04,960 and shovel men to servers. The, so we started, we, we, we 483 00:29:04,960 --> 00:29:07,720 drew a map on the, on the wall, on the whiteboard, and we 484 00:29:07,840 --> 00:29:10,000 pointed where every single person lived in the, in the San 485 00:29:10,000 --> 00:29:12,160 Francisco Bay Area. And we wrote out where the 486 00:29:12,160 --> 00:29:14,760 different electronic stores were and said, congratulations. 487 00:29:14,760 --> 00:29:17,320 As part of working here, you need to stop by that store on 488 00:29:17,320 --> 00:29:20,240 your way in and pick up as many of these drives as you can. 489 00:29:20,920 --> 00:29:24,200 And we'll to keep doing this. And that worked for a while 490 00:29:24,200 --> 00:29:27,160 until they changed it and said limit 2 per person. 491 00:29:27,520 --> 00:29:31,160 And so then we, we got our customers involved and, and said 492 00:29:31,160 --> 00:29:34,880 if you can ship us hard drives, we will reimburse you for those 493 00:29:34,880 --> 00:29:36,320 hard drives. And people started sending us 494 00:29:36,320 --> 00:29:37,840 hard drives from all across the country. 495 00:29:38,080 --> 00:29:43,120 And it was this whole thing of basically community building to 496 00:29:43,120 --> 00:29:47,560 get supply chain from across the country to ship us hard drives. 497 00:29:48,040 --> 00:29:50,960 So it was, you know, to your, I guess your thing of like 498 00:29:51,400 --> 00:29:55,680 obstacles when we overcome that was a scary moment for the 499 00:29:55,680 --> 00:29:58,840 company, but it was also a moment where it brought us 500 00:29:58,840 --> 00:30:01,960 together and it brought a lot of our customers in as part of our 501 00:30:01,960 --> 00:30:03,600 community. I love that. 502 00:30:03,600 --> 00:30:06,200 What a great and crazy story. You're right, this is a crazy 503 00:30:06,200 --> 00:30:07,520 story. Who would have thought a flood 504 00:30:07,520 --> 00:30:09,480 in Thailand and all of a sudden you were able to take it 505 00:30:09,480 --> 00:30:11,720 pragmatically and turn into something positive. 506 00:30:11,720 --> 00:30:13,360 So there's a pragmatic optimism. I love it. 507 00:30:13,720 --> 00:30:14,920 All right, Glenn, final question for you. 508 00:30:14,920 --> 00:30:17,240 What is the best piece of advice you'd like to give the audience 509 00:30:17,240 --> 00:30:24,240 or your 30 year old self? So one thing I would say is, you 510 00:30:24,240 --> 00:30:29,240 know, think about the people that are being and around you 511 00:30:29,240 --> 00:30:32,080 and who you want to have in your life for a while. 512 00:30:32,400 --> 00:30:35,920 When I, when I look back, I, you know, I said I feel lucky that I 513 00:30:35,920 --> 00:30:38,960 was able to start this company with my Co founders. 514 00:30:39,280 --> 00:30:42,280 Those people are ones that I worked with at the prior 515 00:30:42,280 --> 00:30:43,800 company. And some of them were people 516 00:30:43,800 --> 00:30:47,560 that I worked with all the way back in 1999 at the company 517 00:30:47,560 --> 00:30:50,320 before that. And I would say, you know, I 518 00:30:50,320 --> 00:30:53,800 kind of fell into that first company, right? 519 00:30:55,520 --> 00:31:00,640 But the fact that I was able to work with them really set me 520 00:31:00,640 --> 00:31:02,680 down this path in this trajectory. 521 00:31:03,000 --> 00:31:07,920 And you know, they were amazing Co founders for for me with back 522 00:31:07,920 --> 00:31:11,280 ways, you know, back ways would not have existed if it weren't 523 00:31:11,280 --> 00:31:16,280 for them, right? And, and so just, you know, if 524 00:31:16,400 --> 00:31:19,400 if I were telling my 30 year old stuff, I would have said be even 525 00:31:19,400 --> 00:31:24,080 more thoughtful, be even more focused on who are the people 526 00:31:24,320 --> 00:31:28,800 that inspire you or the people that, you know, bring out the 527 00:31:28,800 --> 00:31:31,240 best version of you, that compliment you, that challenge 528 00:31:31,240 --> 00:31:34,560 you, you know, who are those people and actively work to keep 529 00:31:34,560 --> 00:31:38,080 them in your life. I, I feel like I got lucky to 530 00:31:38,080 --> 00:31:41,480 have fallen in with some of those people, But, you know, 531 00:31:41,560 --> 00:31:45,120 being thoughtful about it would have, you know, probably paid 532 00:31:45,120 --> 00:31:47,480 off dividends. Absolutely love it. 533 00:31:47,480 --> 00:31:49,360 So you're saying relationships, right, like the power of 534 00:31:49,360 --> 00:31:52,040 relationships? So I had a doctor on a few 535 00:31:52,040 --> 00:31:55,680 months ago and he said the number one most common trait for 536 00:31:55,680 --> 00:31:58,600 success, successful longevity and happiness. 537 00:31:59,000 --> 00:32:01,560 It's healthy relationships. So it speaks right to your 538 00:32:01,560 --> 00:32:03,200 point. All right, beautiful, glad. 539 00:32:03,200 --> 00:32:04,640 Thank you so much for coming on the show. 540 00:32:04,640 --> 00:32:07,760 Take your symbol as BLZE and hopefully Congrats on all your 541 00:32:07,760 --> 00:32:09,880 success and hopefully we'll have you on again soon. 542 00:32:09,880 --> 00:32:11,560 This was fantastic. Sounds great. 543 00:32:11,560 --> 00:32:13,000 Thank you for the time, Adam. Appreciate it.