All posts by Gleb Budman

Wanted: Senior Director of Product Management

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/wanted-senior-director-of-product-management/

We're Hiring -- Senior Director of Product Management

“You know what’s worth every. single. penny? @backblaze #lifesaver”
Andrei P. (Backblaze customer)

Do you want to lead product management for a set of products that have helped hundreds of thousands of customers in over 150 countries with their storage and backup needs; products people love and are often grateful for? Let’s chat.

Backblaze started over a decade ago and built a cloud storage platform, which is 1/4th the price of Amazon/Google/Microsoft, by developing custom Storage Pod hardware and purpose-built Vault software. On top of it, we’ve built out three business lines:

  • Personal Backup — consumer cloud backup for Mac/PCs
  • Business Backup — business cloud backup for Macs/PCs
  • B2 Cloud Storage — high-performance cloud storage for backups, hosting, development

All three generate millions of dollars in revenue and are loved for their ease-of-use and affordability.

And that’s where you come in. We’re hiring a Director of Product Management, reporting to me (CEO), to lead the product management function for Backblaze. You would be the first product manager and get to establish the approach as well as drive the roadmap in a fast-growing company that is cash-flow positive and has built a cloud storage platform on the scale of Dropbox & Facebook with a mere $3m of funding.

So if you:

Care deeply about product experience: You learn about customer needs, empathize with them, and aim to build a product experience that they’ll love. You believe products should be easy-to-use, even if they’re being used by people who are extremely technical. You always start with “what’s the right customer experience” and then work backwards from there.

Use gut and data: You research the market and dig into data from surveys, sales, and support; but also have good judgement to interpret the data and make decisions with imperfect information.

Work with everyone: You know that this role is one of the most cross-functional in the company, needing input from across the organization on product needs, planning with engineering on what’s possible when, and planning and communication to the organization around roadmaps and launches. You care about culture and values and like to be a steward for values such as transparency, collaboration, inclusiveness, accountability and experimentation.

Think big picture: You look at where the market is headed and come up with strategy and roadmaps to deliver product lines to support the future.

And sweat the details: You ensure the individual features are clearly defined and work with design and engineering to get them built.

Build enough process: You build clear processes/guidelines/documents that are necessary to communicate and scale an organization, but know that a 100-page requirements document will never get read.

Are technically proficient: You don’t have to have an engineering background, but among your products you will be managing an API-enabled storage platform used by developers, and that can’t be scary.

Embrace life at a growth-stage company: You are comfortable with an environment where product management hasn’t been defined role. You embrace the challenge of defining and establishing the role within an existing company.

Have launched multiple successful products: preferably on multiple platforms (Windows, macOS, Web, iOS, Android)

Are familiar with storage/backup: You don’t have to know about storage or backup. (Most of us didn’t when we started.) But it wouldn’t hurt.

If this sounds like you, I’d love to chat with you about taking ownership of our product management function to create the next evolution of our products.

The post Wanted: Senior Director of Product Management appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Subscription Updates for Computer Backup

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/backblaze-computer-backup-pricing-change/

Backblaze laptop

Since 2008, we have offered unlimited Computer Backup for $5 per month. Today, after more than a decade of providing unlimited backup at that same price while also continuing to add features and functionality, we are announcing a price increase.

Effective for new purchases and renewals after March 11, 2019 at 5PM Pacific, our prices will change to:

2019 pricing

More than ten years ago, a friend’s computer crashed, taking with it all her writing and other files. Since she had no backup, she lost everything. As a result, we asked friends, family, and co-workers what they did for backup. The answers were primarily “nothing” or “not enough.” Five of us decided to quit our jobs and commit to working on this problem for a year with no salary in the hopes that we could help save a few people from this type of loss.

A lot has changed since then. Apple’s Time Machine, iPhone, iPad, Watch, and iCloud didn’t exist when we first started; Google Drive, Google Cloud, and Microsoft Azure were years away from being announced. Even for techies, the arrival of clouds mostly meant the need to bring an umbrella. Maxtor, at the time the third-largest hard drive vendor, had just been acquired by Seagate, and HGST was still a stand-alone hard drive company. The 1TB hard drive was a breakthrough in capacity.

Why The Change?

The short answer is that we have enhanced the service in many ways and storage costs have gone up. We have continually removed impediments to getting data backed up — no file size restrictions, speeding up uploads, all while data sets have grown larger and larger. We’ve worked hard to avoid raising our prices, which resulted in some great storage innovations and has allowed us to keep our original prices for more than a decade. By making this decision now, we are ensuring we can continue to offer unlimited backup and keep improving our Computer Backup service. I’d like to go into further detail on the two primary sources of our increased costs: 1) enhancements to the service, and 2) the market cost of storage.

1) Enhancements to the service

When we launched our service, we were (and still are) committed to providing unlimited backup. In addition, over the years, we’ve introduced many enhancements to improve the product in ways that have increased our costs. As consumer data has expanded, we have made sure that we continually back up all data as quickly as possible.

When we say unlimited, we mean unlimited. Here are a few examples of that commitment:

  • Removed all limits on what can be backed up. Originally 4GB was the maximum size any individual file could be and VM images, ISOs, plus other file types that aren’t typically user data were excluded.
  • Sped up backups. Combined small files into bundles, added threading to allow 30 backup processes at once, and added automatic thread management. This means your data gets backed up as fast as your setup allows.
  • Expanded restore options. Expanded the maximum size of Restore by Mail from 0.5 TB to 8 TB on a hard drive, and from a 4 GB DVD to a 256 GB flash drive. We also introduced the Restore Return Refund program. It’s a program our customers love but most other players in the industry have abandoned due to the costs of shipping, packaging, drive replacement, etc.
  • A bunch of other features. Locate My Computer, Preview/Access/Share, two-factor verification, iOS/Android apps, network management, Save to B2, and many of the other features/functions not only incurred development costs but have ongoing server/bandwidth expenses.

Other services have moved away from unlimited plans in favor of tiered pricing options (and different feature sets for different customers). Our customers tell us they love simplicity and predictability. While we are changing our prices, we remain fully committed to providing simple, reliable computer backup.

2) Market cost of storage

The volume of personal data has been skyrocketing for the last decade. In many ways our daily lives generate more data. We now carry a HD video camera in our pockets, music/video downloads are ubiquitous, and no event goes by without memorializing it with a photo or a social media post.

Historically, Backblaze benefitted from hard drives growing in capacity and decreasing in price. Over our first few years, these two trends approximately canceled each other out (customer data grew at approximately the same rate as hard drives decreased in price). Unfortunately, the 2011 floods in Thailand caused a step-function increase in the cost of drives that the market has still not recovered from, and the rate of price decreases on hard drives has slowed down.

Our team works aggressively to reduce our cost of storage year over year. And we have managed to create enough efficiencies to have kept our 2008 pricing. We designed our own Storage Pods, wrote our cloud storage file system, used consumer hard drives and analyzed which had the best price/reliability mix for our use-case, built client-side deduplication, went to crazy extremes during the Thailand drive crisis, and continue working proactively every day to drive down the cost of storage.

As a result, we believe that we have the lowest cost of storage in the industry. (An indicator of this is that we offer our infrastructure-as-a-service cloud storage at 1/4th the price of Amazon, Google, or Microsoft.) Despite that, the amount of storage per customer has grown faster than the reduction in costs.

Going Forward

A lot has changed in the decade since we founded Backblaze. We now offer backup for consumers and businesses, as well as raw object storage. We store over 750 petabytes of data for hundreds of thousands of customers in over 150 countries, and have helped customers recover over 35 billion files. What hasn’t changed is our desire to continue providing a service we’re proud of.

With all of that, we determined that it was important for us to take this step. It was not a decision we took lightly. We are committed to unlimited backup and want to be able to continue to invest in the service. We spent months making sure that we made this change the right way, including providing something for our existing and loyal customers.

To say thank you, we are offering existing customers the ability to extend existing Computer Backup licenses by one year for $50 per computer (the price of our original annual plan from 2008). Please read the Subscription Extension Program FAQ to learn more about this program and how you can extend your existing license for one year at the current pricing.

Thank you for being a customer and we look forward to protecting your data for many years to come.

The post Subscription Updates for Computer Backup appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Backblaze and Cloudflare Partner to Provide Free Data Transfer

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/backblaze-and-cloudflare-partner-to-provide-free-data-transfer/

 Backblaze B2 Free Data Transfer to Cloudflare

Today we are announcing that beginning immediately, Backblaze B2 customers will be able to download data stored in B2 to Cloudflare for zero transfer fees. This happens automatically once Cloudflare is configured to distribute your B2 files. This means that Backblaze B2 can now be used as an origin store for the Cloudflare CDN and edge network, providing customers enhanced performance and access to their content stored on B2. The result is that customers can save up to 75% on storage versus Amazon S3 to store their content in the cloud and deliver it worldwide.

The zero B2 transfer fees are available to all Cloudflare customers using any plan. Cloudflare customers can also use paid add-ons such as Argo and Workers to enhance the routing and security of the B2 files being delivered over the Cloudflare CDN. To implement this service, Backblaze and Cloudflare have directly connected, thereby allowing near-instant data transfers from B2 to Cloudflare.

Backblaze has prepared a guide on “Using Backblaze B2 storage with Cloudflare.” This guide provides step-by-step instructions on how to set up Backblaze B2 with Cloudflare to take advantage of this program.

The Bandwidth Alliance

The driving force behind the free transfer program is the Bandwidth Alliance. Backblaze and Cloudflare are two of the founding members of this group of forward-thinking cloud and networking companies that are committed to providing the best and most cost-efficient experience for our mutual customers. Additional founding members of the Bandwidth Alliance include Automattic (WordPress), DigitalOcean, IBM Cloud, Microsoft Azure, Packet, and other leading cloud and networking companies.

How Companies Can Leverage the Bandwidth Alliance

Below are examples of how Bandwidth Alliance partners can work together to save customers on their data transfer fees.

Hosting Website Assets

Whether you are a professional webmaster or just run a few homegrown sites, you’ve lived the frustration of having a slow website. Over the past few years these challenges have become more acute as video and other types of rich media have become core to the website experience. This new content has also translated to higher storage and bandwidth costs. That’s where Backblaze B2 and Cloudflare come in.diagram of zero cost data transfer from Backblaze B2 to Cloudflare CDN

Customers can store their videos, photos, and other assets in Backblaze B2’s pay-as-you-go cloud storage and serve the site with Cloudflare’s CDN and edge services. The result is an amazingly affordable cloud-based solution that dramatically improves web site performance and reliability. And customers pay each service for what they do best.

“I am extremely happy with my experience serving html/css/js and over 17 million images from B2 via Cloudflare Workers. Page load time has been great and costs are minimal.”

— Jacob Hands, Lead Developer, FactorioMaps.com

Media Content Distribution

The ability to download content from B2 cloud storage to the Cloudflare CDN for zero transfer cost is the just the beginning. A company needing to distribute media can now store original assets in Backblaze B2, send them to a compute service to transcode and transmux them, and forward the finished assets to be served up by Cloudflare. Backblaze and Packet previously announced zero transfer fees between Backblaze B2 storage and Packet compute services. This enabled customers to store data in B2 at 1/4th the price of competitive offerings and then process data for transcoding, AI, data analysis, and more inside of Packet without worrying about data transfer fees. Packet is also a member of the Bandwidth Alliance and will deliver content to Cloudflare for zero transfer fees as well.

diagram of zero cost data transfer flow from Backblaze B2 to Packet Compute to Cloudflare CDN

Process Now, Distribute Later

A variation of the example above is for a company to store the originals in B2, transcode and transmux the files in Packet, then put those versions back into B2, and finally serve them up via Cloudflare. All of this is done with zero transfer fees between Backblaze, Packet, and Cloudflare. The result is all originals and transmuxed versions are stored at 1/4th the prices of other storage, and served up efficiently via Cloudflare.diagram of data transfer flow between B2 to Packet back to B2 to Cloudflare

In all cases you would only pay for services you use and not for the cost to move data between those services. This results in a predictable and affordable cost for a given project using industry leading best-of-breed services.

Moving Forward

The members of the Bandwidth Alliance are committed to enabling the best and most cost efficient cloud services when it comes to working with data stored in the cloud. Backblaze has committed to a transfer fee of $0 to move content from B2 to either Cloudflare or Packet. We think that’s a great step in the right direction. And if you are cloud provider, let us know if you’d be interested in taking a step like this one with Backblaze.

The post Backblaze and Cloudflare Partner to Provide Free Data Transfer appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Welcome John – CFO/COO

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/welcome-john-cfo-coo/

Backblaze and most U.S. companies are incorporated in Delaware, which requires assigning a President and Secretary. As good practice and typically required to do business in other states, companies also assign a Chief Financial Officer (CFO). When we started Backblaze over a decade ago, we listed Brian Wilson (co-founder and CTO) as the CFO. BrianW always joked he was the least qualified person for the role as he never balanced his checkbook. He was being modest – in reality he put together simple processes to follow to track finances and kept detailed records.

As Backblaze grew, our finances became more complex. We switched from spreadsheets to Quickbooks and from cash-based accounting to GAAP accounting; went from one product line to three; hired people in multiple states; etc. Luckily we recruited an amazing finance person, Cecilia, who became our controller and made all of this happen.

As we open new data centers, expand internationally, and generally keep growing our finances have become even more complex. We wanted help not only with the workload, but also with visibility and planning, and started thinking it was time for us to recruit a CFO.

But finance wasn’t the only area that grew: HR and legal functions did as well. As we contemplated the role, we ideally wanted someone who would love and care for those areas as well.

I’m thrilled to have John join our team as CFO and Chief Operating Officer (COO), taking on finance, legal, HR, and corporate IT. John has led finance for startups and public companies, is strategic while digging into the details, is one of the hardest working people I’ve ever met, and comes with no ego but a passion for learning and helping. Lets learn a bit more about John!

What is your Backblaze Title?
Chief Financial Officer and Chief Operating Officer

Where are you originally from?
Born in Vietnam but immigrated to the Bay Area when I was 1 year old.

What attracted you to Backblaze?
Taking on the challenges of growing a company along the side of some really, really smart folks.

What do you expect to learn while being at Backblaze?
Having seen how technology can advance the efforts to finding a cure for various diseases or improving the lives of patients, I wanted to learn firsthand what it takes to build and sustain a tech business from a team made up of fantastic individuals at all levels of the organization.

Where else have you worked?
Prior to graduating, I was a pharmacy tech, research associate and teaching assistant while attending UCSB and a QA associate at Genentech. Started my professional career at PricewaterhouseCoopers and have held executive leadership roles in multiple medical device and biotech companies.

Where did you go to school?
I attended the University of California, Santa Barbara.

What’s your dream job?
My dream jobs are the ones I am a part of a team building something special.

Favorite place you’ve traveled?
Japan has been my favorite country to visit.

Favorite hobby?
Traveling and getting to know/experience the local culture of the countries I have visited.

Of what achievement are you most proud?
My most significant achievement has to be the families I have cultivated and have been a part of – both on a personal and a professional level.

Star Trek or Star Wars?
Star Wars.

Coke or Pepsi?
Coke.

Favorite food?
Hard to narrow down to one particular food because I love all types of food, especially the local cuisines of the countries I have visited.

Why do you like certain things?
I like what makes me and those important to me happy, which could be as simple as reading a book with my kids to contributing my efforts towards a greater cause like finding a cure for cancer.

Anything else you’d like you’d like to tell us?
Otherwise, I am pretty boring so not much else of note.

Welcome aboard John, we’re happy to have you!

The post Welcome John – CFO/COO appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Backblaze Announces B2 Compute Partnerships

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/introducing-cloud-compute-services/

Backblaze Announces B2 Compute Partnerships

In 2015, we announced Backblaze B2 Cloud Storage — the most affordable, high performance storage cloud on the planet. The decision to release B2 as a service was in direct response to customers asking us if they could use the same cloud storage infrastructure we use for our Computer Backup service. With B2, we entered a market in direct competition with Amazon S3, Google Cloud Services, and Microsoft Azure Storage. Today, we have over 500 petabytes of data from customers in over 150 countries. At $0.005 / GB / month for storage (1/4th of S3) and $0.01 / GB for downloads (1/5th of S3), it turns out there’s a healthy market for cloud storage that’s easy and affordable.

As B2 has grown, customers wanted to use our cloud storage for a variety of use cases that required not only storage but compute. We’re happy to say that through partnerships with Packet & ServerCentral, today we’re announcing that compute is now available for B2 customers.

Cloud Compute and Storage

Backblaze has directly connected B2 with the compute servers of Packet and ServerCentral, thereby allowing near-instant (< 10 ms) data transfers between services. Also, transferring data between B2 and both our compute partners is free.

  • Storing data in B2 and want to run an AI analysis on it? — There are no fees to move the data to our compute partners.
  • Generating data in an application? — Run the application with one of our partners and store it in B2.
  • Transfers are free and you’ll save more than 50% off of the equivalent set of services from AWS.

These partnerships enable B2 customers to use compute, give our compute partners’ customers access to cloud storage, and introduce new customers to industry-leading storage and compute — all with high-performance, low-latency, and low-cost.

Is This a Big Deal? We Think So

Compute is one of the most requested services from our customers Why? Because it unlocks a number of use cases for them. Let’s look at three popular examples:

Transcoding Media Files

B2 has earned wide adoption in the Media & Entertainment (“M&E”) industry. Our affordable storage and download pricing make B2 great for a wide variety of M&E use cases. But many M&E workflows require compute. Content syndicators, like American Public Television, need the ability to transcode files to meet localization and distribution management requirements.

There are a multitude of reasons that transcode is needed — thumbnail and proxy generation enable M&E professionals to work efficiently. Without compute, the act of transcoding files remains cumbersome. Either the files need to be brought down from the cloud, transcoded, and then pushed back up or they must be kept locally until the project is complete. Both scenarios are inefficient.

Starting today, any content producer can spin up compute with one of our partners, pay by the hour for their transcode processing, and return the new media files to B2 for storage and distribution. The company saves money, moves faster, and ensures their files are safe and secure.

Disaster Recovery

Backblaze’s heritage is based on providing outstanding backup services. When you have incredibly affordable cloud storage, it ends up being a great destination for your backup data.

Most enterprises have virtual machines (“VMs”) running in their infrastructure and those VMs need to be backed up. In a disaster scenario, a business wants to know they can get back up and running quickly.

With all data stored in B2, a business can get up and running quickly. Simply restore your backed up VM to one of our compute providers, and your business will be able to get back online.

Since B2 does not place restrictions, delays, or penalties on getting data out, customers can get back up and running quickly and affordably.

Saving $74 Million (aka “The Dropbox Effect”)

Ten years ago, Backblaze decided that S3 was too costly a platform to build its cloud storage business. Instead, we created the Backblaze Storage Pod and our own cloud storage infrastructure. That decision enabled us to offer our customers storage at a previously unavailable price point and maintain those prices for over a decade. It also laid the foundation for Netflix Open Connect and Facebook Open Compute.

Dropbox recently migrated the majority of their cloud services off of AWS and onto Dropbox’s own infrastructure. By leaving AWS, Dropbox was able to build out their own data centers and still save over $74 Million. They achieved those savings by avoiding the fees AWS charges for storing and downloading data, which, incidentally, are five times higher than Backblaze B2.

For Dropbox, being able to realize savings was possible because they have access to enough capital and expertise that they can build out their own infrastructure. For companies that have such resources and scale, that’s a great answer.

“Before this offering, the economics of the cloud would have made our business simply unviable.” — Gabriel Menegatti, SlicingDice

The questions Backblaze and our compute partners pondered was “how can we democratize the Dropbox effect for our storage and compute customers? How can we help customers do more and pay less?” The answer we came up with was to connect Backblaze’s B2 storage with strategic compute partners and remove any transfer fees between them. You may not save $74 million as Dropbox did, but you can choose the optimal providers for your use case and realize significant savings in the process.

This Sounds Good — Tell Me More About Your Partners

We’re very fortunate to be launching our compute program with two fantastic partners in Packet and ServerCentral. These partners allow us to offer a range of computing services.

Packet

We recommend Packet for customers that need on-demand, high performance, bare metal servers available by the hour. They also have robust offerings for private / customized deployments. Their offerings end up costing 50-75% of the equivalent offerings from EC2.

To get started with Packet and B2, visit our partner page on Packet.net.

ServerCentral

ServerCentral is the right partner for customers that have business and IT challenges that require more than “just” hardware. They specialize in fully managed, custom cloud solutions that solve complex business and IT challenges. ServerCentral also has expertise in managed network solutions to address global connectivity and content delivery.

To get started with ServerCentral and B2, visit our partner page on ServerCentral.com.

What’s Next?

We’re excited to find out. The combination of B2 and compute unlocks use cases that were previously impossible or at least unaffordable.

“The combination of performance and price offered by this partnership enables me to create an entirely new business line. Before this offering, the economics of the cloud would have made our business simply unviable,” noted Gabriel Menegatti, co-founder at SlicingDice, a serverless data warehousing service. “Knowing that transfers between compute and B2 are free means I don’t have to worry about my business being successful. And, with download pricing from B2 at just $0.01 GB, I know I’m avoiding a 400% tax from AWS on data I retrieve.”

What can you do with B2 & compute? Please share your ideas with us in the comments. And, for those attending NAB 2018 in Las Vegas next week, please come by and say hello!

The post Backblaze Announces B2 Compute Partnerships appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Early Challenges: Making Critical Hires

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/early-challenges-making-critical-hires/

row of potential employee hires sitting waiting for an interview

In 2009, Google disclosed that they had 400 recruiters on staff working to hire nearly 10,000 people. Someday, that might be your challenge, but most companies in their early days are looking to hire a handful of people — the right people — each year. Assuming you are closer to startup stage than Google stage, let’s look at who you need to hire, when to hire them, where to find them (and how to help them find you), and how to get them to join your company.

Who Should Be Your First Hires

In later stage companies, the roles in the company have been well fleshed out, don’t change often, and each role can be segmented to focus on a specific area. A large company may have an entire department focused on just cubicle layout; at a smaller company you may not have a single person whose actual job encompasses all of facilities. At Backblaze, our CTO has a passion and knack for facilities and mostly led that charge. Also, the needs of a smaller company are quick to change. One of our first hires was a QA person, Sean, who ended up being 100% focused on data center infrastructure. In the early stage, things can shift quite a bit and you need people that are broadly capable, flexible, and most of all willing to pitch in where needed.

That said, there are times you may need an expert. At a previous company we hired Jon, a PhD in Bayesian statistics, because we needed algorithmic analysis for spam fighting. However, even that person was not only able and willing to do the math, but also code, and to not only focus on Bayesian statistics but explore a plethora of spam fighting options.

When To Hire

If you’ve raised a lot of cash and are willing to burn it with mistakes, you can guess at all the roles you might need and start hiring for them. No judgement: that’s a reasonable strategy if you’re cash-rich and time-poor.

If your cash is limited, try to see what you and your team are already doing and then hire people to take those jobs. It may sound counterintuitive, but if you’re already doing it presumably it needs to be done, you have a good sense of the type of skills required to do it, and you can bring someone on-board and get them up to speed quickly. That then frees you up to focus on tasks that can’t be done by someone else. At Backblaze, I ran marketing internally for years before hiring a VP of Marketing, making it easier for me to know what we needed. Once I was hiring, my primary goal was to find someone I could trust to take that role completely off of me so I could focus solely on my CEO duties

Where To Find the Right People

Finding great people is always difficult, particularly when the skillsets you’re looking for are highly in-demand by larger companies with lots of cash and cachet. You, however, have one massive advantage: you need to hire 5 people, not 5,000.

People You Worked With

The absolutely best people to hire are ones you’ve worked with before that you already know are good in a work situation. Consider your last job, the one before, and the one before that. A significant number of the people we recruited at Backblaze came from our previous startup MailFrontier. We knew what they could do and how they would fit into the culture, and they knew us and thus could quickly meld into the environment. If you didn’t have a previous job, consider people you went to school with or perhaps individuals with whom you’ve done projects previously.

People You Know

Hiring friends, family, and others can be risky, but should be considered. Sometimes a friend can be a “great buddy,” but is not able to do the job or isn’t a good fit for the organization. Having to let go of someone who is a friend or family member can be rough. Have the conversation up front with them about that possibility, so you have the ability to stay friends if the position doesn’t work out. Having said that, if you get along with someone as a friend, that’s one critical component of succeeding together at work. At Backblaze we’ve hired a number of people successfully that were friends of someone in the organization.

Friends Of People You Know

Your network is likely larger than you imagine. Your employees, investors, advisors, spouses, friends, and other folks all know people who might be a great fit for you. Make sure they know the roles you’re hiring for and ask them if they know anyone that would fit. Search LinkedIn for the titles you’re looking for and see who comes up; if they’re a 2nd degree connection, ask your connection for an introduction.

People You Know About

Sometimes the person you want isn’t someone anyone knows, but you may have read something they wrote, used a product they’ve built, or seen a video of a presentation they gave. Reach out. You may get a great hire: worst case, you’ll let them know they were appreciated, and make them aware of your organization.

Other Places to Find People

There are a million other places to find people, including job sites, community groups, Facebook/Twitter, GitHub, and more. Consider where the people you’re looking for are likely to congregate online and in person.

A Comment on Diversity

Hiring “People You Know” can often result in “Hiring People Like You” with the same workplace experiences, culture, background, and perceptions. Some studies have shown [1, 2, 3, 4] that homogeneous groups deliver faster, while heterogeneous groups are more creative. Also, “Hiring People Like You” often propagates the lack of women and minorities in tech and leadership positions in general. When looking for people you know, keep an eye to not discount people you know who don’t have the same cultural background as you.

Helping People To Find You

Reaching out proactively to people is the most direct way to find someone, but you want potential hires coming to you as well. To do this, they have to a) be aware of you, b) know you have a role they’re interested in, and c) think they would want to work there. Let’s tackle a) and b) first below.

Your Blog

I started writing our blog before we launched the product and talked about anything I found interesting related to our space. For several years now our team has owned the content on the blog and in 2017 over 1.5 million people read it. Each time we have a position open it’s published to the blog. If someone finds reading about backup and storage interesting, perhaps they’d want to dig in deeper from the inside. Many of the people we’ve recruited have mentioned reading the blog as either how they found us or as a factor in why they wanted to work here.
[BTW, this is Gleb’s 200th post on Backblaze’s blog. The first was in 2008. — Editor]

Your Email List

In addition to the emails our blog subscribers receive, we send regular emails to our customers, partners, and prospects. These are largely focused on content we think is directly useful or interesting for them. However, once every few months we include a small mention that we’re hiring, and the positions we’re looking for. Often a small blurb is all you need to capture people’s imaginations whether they might find the jobs interesting or can think of someone that might fit the bill.

Your Social Involvement

Whether it’s Twitter or Facebook, Hacker News or Slashdot, your potential hires are engaging in various communities. Being socially involved helps make people aware of you, reminds them of you when they’re considering a job, and paints a picture of what working with you and your company would be like. Adam was in a Reddit thread where we were discussing our Storage Pods, and that interaction was ultimately part of the reason he left Apple to come to Backblaze.

Convincing People To Join

Once you’ve found someone or they’ve found you, how do you convince them to join? They may be currently employed, have other offers, or have to relocate. Again, while the biggest companies have a number of advantages, you might have more unique advantages than you realize.

Why Should They Join You

Here are a set of items that you may be able to offer which larger organizations might not:

Role: Consider the strengths of the role. Perhaps it will have broader scope? More visibility at the executive level? No micromanagement? Ability to take risks? Option to create their own role?

Compensation: In addition to salary, will their options potentially be worth more since they’re getting in early? Can they trade-off salary for more options? Do they get option refreshes?

Benefits: In addition to healthcare, food, and 401(k) plans, are there unique benefits of your company? One company I knew took the entire team for a one-month working retreat abroad each year.

Location: Most people prefer to work close to home. If you’re located outside of the San Francisco Bay Area, you might be at a disadvantage for not being in the heart of tech. But if you find employees close to you you’ve got a huge advantage. Sometimes it’s micro; even in the Bay Area the difference of 5 miles can save 20 minutes each way every day. We located the Backblaze headquarters in San Mateo, a middle-ground that made it accessible to those coming from San Jose and San Francisco. We also chose a downtown location near a train, restaurants, and cafes: all to make it easier and more pleasant. Also, are you flexible in letting your employees work remotely? Our systems administrator Elliott is about to embark on a long-term cross-country journey working from an RV.

Environment: Open office, cubicle, cafe, work-from-home? Loud/quiet? Social or focused? 24×7 or work-life balance? Different environments appeal to different people.

Team: Who will they be working with? A company with 100,000 people might have 100 brilliant ones you’d want to work with, but ultimately we work with our core team. Who will your prospective hires be working with?

Market: Some people are passionate about gaming, others biotech, still others food. The market you’re targeting will get different people excited.

Product: Have an amazing product people love? Highlight that. If you’re lucky, your potential hire is already a fan.

Mission: Curing cancer, making people happy, and other company missions inspire people to strive to be part of the journey. Our mission is to make storing data astonishingly easy and low-cost. If you care about data, information, knowledge, and progress, our mission helps drive all of them.

Culture: I left this for last, but believe it’s the most important. What is the culture of your company? Finding people who want to work in the culture of your organization is critical. If they like the culture, they’ll fit and continue it. We’ve worked hard to build a culture that’s collaborative, friendly, supportive, and open; one in which people like coming to work. For example, the five founders started with (and still have) the same compensation and equity. That started a culture of “we’re all in this together.” Build a culture that will attract the people you want, and convey what the culture is.

Writing The Job Description

Most job descriptions focus on the all the requirements the candidate must meet. While important to communicate, the job description should first sell the job. Why would the appropriate candidate want the job? Then share some of the requirements you think are critical. Remember that people read not just what you say but how you say it. Try to write in a way that conveys what it is like to actually be at the company. Ahin, our VP of Marketing, said the job description itself was one of the things that attracted him to the company.

Orchestrating Interviews

Much can be said about interviewing well. I’m just going to say this: make sure that everyone who is interviewing knows that their job is not only to evaluate the candidate, but give them a sense of the culture, and sell them on the company. At Backblaze, we often have one person interview core prospects solely for company/culture fit.

Onboarding

Hiring success shouldn’t be defined by finding and hiring the right person, but instead by the right person being successful and happy within the organization. Ensure someone (usually their manager) provides them guidance on what they should be concentrating on doing during their first day, first week, and thereafter. Giving new employees opportunities and guidance so that they can achieve early wins and feel socially integrated into the company does wonders for bringing people on board smoothly

In Closing

Our Director of Production Systems, Chris, said to me the other day that he looks for companies where he can work on “interesting problems with nice people.” I’m hoping you’ll find your own version of that and find this post useful in looking for your early and critical hires.

Of course, I’d be remiss if I didn’t say, if you know of anyone looking for a place with “interesting problems with nice people,” Backblaze is hiring. 😉

The post Early Challenges: Making Critical Hires appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

All-In on Unlimited Backup

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/all-in-on-unlimited-backup/

chips on computer with cloud backup

The cloud backup industry has seen its share of tumultuousness. BitCasa, Dell DataSafe, Xdrive, and a dozen others have closed up shop. Mozy, Amazon, and Microsoft offered, but later canceled, their unlimited offerings. Recently, CrashPlan for Home customers were notified that their service was being end-of-lifed. Then today we’ve heard from Carbonite customers who are frustrated by this morning’s announcement of a price increase from Carbonite.

We believe that the fundamental goal of a cloud backup is having peace-of-mind: knowing your data — all of it — is safe. For over 10 years Backblaze has been providing that peace-of-mind by offering completely unlimited cloud backup to our customers. And we continue to be committed to that. Knowing that your cloud backup vendor is not going to disappear or fundamentally change their service is an essential element in achieving that peace-of-mind.

Committed to Unlimited Backup

When Mozy discontinued their unlimited backup on Jan 31, 2011, a lot of people asked, “Does this mean Backblaze will discontinue theirs as well?” At that time I wrote the blog post Backblaze is committed to unlimited backup. That was seven years ago. Since then we’ve continued to make Backblaze cloud backup better: dramatically speeding up backups and restores, offering the unique and very popular Restore Return Refund program, enabling direct access and sharing of any file in your backup, and more. We also introduced Backblaze Groups to enable businesses and families to manage backups — all at no additional cost.

How That’s Possible

I’d like to answer the question of “How have you been able to do this when others haven’t?

First, commitment. It’s not impossible to offer unlimited cloud backup, but it’s not easy. The Backblaze team has been committed to unlimited as a core tenet.

Second, we have pursued the technical, business, and cultural steps required to make it happen. We’ve designed our own servers, written our cloud storage software, run our own operations, and been continually focused on every place we could optimize a penny out of the cost of storage. We’ve built a culture at Backblaze that cares deeply about that.

Ensuring Peace-of-Mind

Price increases and plan changes happen in our industry, but Backblaze has consistently been the low price leader, and continues to stand by the foundational element of our service — truly unlimited backup storage. Carbonite just announced a price increase from $60 to $72/year, and while that’s not an astronomical increase, it’s important to keep in mind the service that they are providing at that rate. The basic Carbonite plan provides a service that doesn’t back up videos or external hard drives by default. We think that’s dangerous. No one wants to discover that their videos weren’t backed up after their computer dies, or have to worry about the safety and durability of their data. That is why we have continued to build on our foundation of unlimited, as well as making our service faster and more accessible. All of these serve the goal of ensuring peace-of-mind for our customers.

3 Months Free For You & A Friend

As part of our commitment to unlimited, refer your friends to receive three months of Backblaze service through March 15, 2018. When you Refer-a-Friend with your personal referral link, and they subscribe, both of you will receive three months of service added to your account. See promotion details on our Refer-a-Friend page.

Want A Reminder When Your Carbonite Subscription Runs Out?

If you’re considering switching from Carbonite, we’d love to be your new backup provider. Enter your email and the date you’d like to be reminded in the form below and you’ll get a friendly reminder email from us to start a new backup plan with Backblaze. Or, you could start a free trial today.

We think you’ll be glad you switched, and you’ll have a chance to experience some of that Backblaze peace-of-mind for your data.

Please Send Me a Reminder When I Need a New Backup Provider



 

The post All-In on Unlimited Backup appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Early Challenges: Managing Cash Flow

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/managing-cash-flow/

Cash flow projection charts

This post by Backblaze’s CEO and co-founder Gleb Budman is the eighth in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants
  7. The Decision on Transparency
  8. Early Challenges: Managing Cash Flow

Use the Join button above to receive notification of new posts in this series.

Running out of cash is one of the quickest ways for a startup to go out of business. When you are starting a company the question of where to get cash is usually the top priority, but managing cash flow is critical for every stage in the lifecycle of a company. As a primarily bootstrapped but capital-intensive business, managing cash flow at Backblaze was and still is a key element of our success and requires continued focus. Let’s look at what we learned over the years.

Raising Your Initial Funding

When starting a tech business in Silicon Valley, the default assumption is that you will immediately try to raise venture funding. There are certainly many advantages to raising funding — not the least of which is that you don’t need to be cash-flow positive since you have cash in the bank and the expectation is that you will have a “burn rate,” i.e. you’ll be spending more than you make.

Note: While you’re not expected to be cash-flow positive, that doesn’t mean you don’t have to worry about cash. Cash-flow management will determine your burn rate. Whether you can get to cash-flow breakeven or need to raise another round of funding is a direct byproduct of your cash flow management.

Also, raising funding takes time (most successful fundraising cycles take 3-6 months start-to-finish), and time at a startup is in short supply. Constantly trying to raise funding can take away from product development and pursuing growth opportunities. If you’re not successful in raising funding, you then have to either shut down or find an alternate method of funding the business.

Sources of Funding

Depending on the stage of the company, type of company, and other factors, you may have access to different sources of funding. Let’s list a number of them:

Customers

Sales — the best kind of funding. It is non-dilutive, doesn’t have to be paid back, and is a direct metric of the success of your company.

Pre-Sales — some customers may be willing to pay you for a product in beta, a test, or pre-pay for a product they’ll receive when finished. Pre-Sales income also is great because it shares the characteristics of cash from sales, but you get the cash early. It also can be a good sign that the product you’re building fills a market need. We started charging for Backblaze computer backup while it was still in private beta, which allowed us to not only collect cash from customers, but also test the billing experience and users’ real desire for the service.

Services — if you’re a service company and customers are paying you for that, great. You can effectively scale for the number of hours available in a day. As demand grows, you can add more employees to increase the total number of billable hours.

Note: If you’re a product company and customers are paying you to consult, that can provide much needed cash, and could provide feedback toward the right product. However, it can also distract from your core business, send you down a path where you’re building a product for a single customer, and addict you to a path that prevents you from building a scalable business.

Investors

Yourself — you likely are putting your time into the business, and deferring salary in the process. You may also put your own cash into the business either as an investment or a loan.

Angels — angels are ideal as early investors since they are used to investing in businesses with little to no traction. AngelList is a good place to find them, though finding people you’re connected with through someone that knows you well is best.

Crowdfunding — a component of the JOBS Act permitted entrepreneurs to raise money from nearly anyone since May 2016. The SEC imposes limits on both investors and the companies. This article goes into some depth on the options and sites available.

VCs — VCs are ideal for companies that need to raise at least a few million dollars and intend to build a business that will be worth over $1 billion.

Debt

Friends & Family — F&F are often the first people to give you money because they are investing in you. It’s great to have some early supporters, but it also can be risky to take money from people who aren’t used to the risks. The key advice here is to only take money from people who won’t mind losing it. If someone is talking about using their children’s college funds or borrowing from their 401k, say ‘no thank you’ — even if they’re sure they want to loan you money.

Bank Loans — a variety of loan types exist, but most either require the company to have been operational for a couple years, be able to borrow against money the company has or is making, or be able to get a personal guarantee from the founders whereby their own credit is on the line. Fundera provides a good overview of loan options and can help secure some, but most will not be an option for a brand new startup.

Grants

Government — in some areas there is the potential for government grants to facilitate research. The SBIR program facilitates some such grants.

At Backblaze, we used a number of these options:

• Investors/Yourself
We loaned a cumulative total of a couple hundred thousand dollars to the company and invested our time by going without a salary for a year and a half.
• Customers/Pre-Sales
We started selling the Backblaze service while it was still in beta.
• Customers/Sales
We launched v1.0 and kept selling.
• Investors/Angels
After a year and a half, we raised $370k from 11 angels. All of them were either people whom we knew personally or were a strong recommendation from a mutual friend.
• Debt/Loans
After a couple years we were able to get equipment leases whereby the Storage Pods and hard drives were used as collateral to secure the lease on them.
• Investors/VCs
Ater five years we raised $5m from TMT Investments to add to the balance sheet and invest in growth.

The variety and quantity of sources we used is by no means uncommon.

GAAP vs. Cash

Most companies start tracking financials based on cash, and as they scale they switch to GAAP (Generally Accepted Accounting Principles). Cash is easier to track — we got paid $XXXX and spent $YYY — and as often mentioned, is required for the business to stay alive. GAAP has more subtlety and complexity, but provides a clearer picture of how the business is really doing. Backblaze was on a ‘cash’ system for the first few years, then switched to GAAP. For this post, I’m going to focus on things that help cash flow, not GAAP profitability.

Stages of Cash Flow Management

All-spend

In a pure service business (e.g. solo proprietor law firm), you may have no expenses other than your time, so this stage doesn’t exist. However, in a product business there is a period of time where you are building the product and have nothing to sell. You have zero cash coming in, but have cash going out. Your cash-flow is completely negative and you need funds to cover that.

Sales-generating

Starting to see cash come in from customers is thrilling. I initially had our system set up to email me with every $5 payment we received. You’re making sales, but not covering expenses.

Ramen-profitable

But it takes a lot of $5 payments to pay for servers and salaries, so for a while expenses are likely to outstrip sales. Getting to ramen-profitable is a critical stage where sales cover the business expenses and are “paying enough for the founders to eat ramen.” This extends the runway for a business, but is not completely sustainable, since presumably the founders can’t (or won’t) live forever on a subsistence salary.

Business-profitable

This is the ultimate stage whereby the business is truly profitable, including paying everyone market-rate salaries. A business at this stage is self-sustaining. (Of course, market shifts and plenty of other challenges can kill the business, but cash-flow issues alone will not.)

Note, I’m using the word ‘profitable’ here to mean this is still on a cash-basis.

Backblaze was in the all-spend stage for just over a year, during which time we built the service and hadn’t yet made the service available to customers. Backblaze was in the sales-generating stage for nearly another year before the company was barely ramen-profitable where sales were covering the company expenses and paying the founders minimum wage. (I say ‘barely’ since minimum wage in the SF Bay Area is arguably never subsistence.) It took almost three more years before the company was business-profitable, paying everyone including the founders market-rate.

Cash Flow Forecasting

When raising funding it’s helpful to think of milestones reached. You don’t necessarily need enough cash on day one to last for the next 100 years of the company. Some good milestones to consider are how much cash you need to prove there is a market need, prove you can build a product to meet that need, or get to ramen-profitable.

Two things to consider:

1) Unit Economics (COGS)

If your product is 100% software, this may not be relevant. Once software is built it costs effectively nothing to deliver the product to one customer or one million customers. However, in most businesses there is some incremental cost to provide the product. If you’re selling a hardware device, perhaps you sell it for $100 but it costs you $50 to make it. This is called “COGS” (Cost of Goods Sold).

Many products rely on cloud services where the costs scale with growth. That model works great, but it’s still important to understand what the costs are for the cloud service you use per unit of product you sell.

Support is often done by the founders early-on in a business, but that is another real cost to factor in and estimate on a per-user basis. Taking all of the per unit costs combined, you may charge $10/month/user for your service, but if it costs you $7/month/user in cloud services, you’re only netting $3/month/user.

2) Operating Expenses (OpEx)

These are expenses that don’t scale with the number of product units you sell. Typically this includes research & development, sales & marketing, and general & administrative expenses. Presumably there is a certain level of these functions required to build the product, market it, sell it, and run the organization. You can choose to invest or cut back on these, but you’ll still make the same amount per product unit.

Incremental Net Profit Per Unit

If you’ve calculated your COGS and your unit economics are “upside down,” where the amount you charge is less than that it costs you to provide your service, it’s worth thinking hard about how that’s going to change over time. If it will not change, there is no scale that will make the business work. Presuming you do make money on each unit of product you sell — what is sometimes referred to as “Contribution Margin” — consider how many of those product units you need to sell to cover your operating expenses as described above.

Calculating Your Profit

The math on getting to ramen-profitable is simple:

(Number of Product Units Sold x Contribution Margin) - Operating Expenses = Profit

If your operating expenses include subsistence salaries for the founders and profit > $0, you’re ramen-profitable.

Improving Cash Flow

Having access to sources of cash, whether from selling to customers or other methods, is excellent. But needing less cash gives you more choices and allows you to either dilute less, owe less, or invest more.

There are two ways to improve cash flow:

1) Collect More Cash

The best way to collect more cash is to provide more value to your customers and as a result have them pay you more. Additional features/products/services can allow this. However, you can also collect more cash by changing how you charge for your product. If you have a subscription, changing from charging monthly to yearly dramatically improves your cash flow. If you have a product that customers use up, selling a year’s supply instead of selling them one-by-one can help.

2) Spend Less Cash

Reducing COGS is a fantastic way to spend less cash in a scalable way. If you can do this without harming the product or customer experience, you win. There are a myriad of ways to also reduce operating expenses, including taking sub-market salaries, using your home instead of renting office space, staying focused on your core product, etc.

Ultimately, collecting more and spending less cash dramatically simplifies the process of getting to ramen-profitable and later to business-profitable.

Be Careful (Why GAAP Matters)

A word of caution: while running out of cash will put you out of business immediately, overextending yourself will likely put you out of business not much later. GAAP shows how a business is really doing; cash doesn’t. If you only focus on cash, it is possible to commit yourself to both delivering products and repaying loans in the future in an unsustainable fashion. If you’re taking out loans, watch the total balance and monthly payments you’re committing to. If you’re asking customers for pre-payment, make sure you believe you can deliver on what they’ve paid for.

Summary

There are numerous challenges to building a business, and ensuring you have enough cash is amongst the most important. Having the cash to keep going lets you keep working on all of the other challenges. The frameworks above were critical for maintaining Backblaze’s cash flow and cash balance. Hopefully you can take some of the lessons we learned and apply them to your business. Let us know what works for you in the comments below.

The post Early Challenges: Managing Cash Flow appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

The Decision on Transparency

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/transparency-in-business/

Backblaze transparency

This post by Backblaze’s CEO and co-founder Gleb Budman is the seventh in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants
  7. The Decision on Transparency

Use the Join button above to receive notification of new posts in this series.

“Are you crazy?” “Why would you do that?!” “You shouldn’t share that!”

These are just a few of the common questions and comments we heard after posting some of the information we have shared over the years. So was it crazy? Misguided? Should you do it?

With that background I’d like to dig into the decision to become so transparent, from releasing stats on hard drive failures, to storage pod specs, to publishing our cloud storage costs, and open sourcing the Reed-Solomon code. What was the thought process behind becoming so transparent when most companies work so hard to hide their inner workings, especially information such as the Storage Pod specs that would normally be considered a proprietary advantage? Most importantly I’d like to explore the positives and negatives of being so transparent.

Sharing Intellectual Property

The first “transparency” that garnered a flurry of “why would you share that?!” came as a result of us deciding to open source our Storage Pod design: publishing the specs, parts, prices, and how to build it yourself. The Storage Pod was a key component of our infrastructure, gave us a cost (and thus competitive) advantage, took significant effort to develop, and had a fair bit of intellectual property: the “IP.”

The negatives of sharing this are obvious: it allows our competitors to use the design to reduce our cost advantage, and it gives away the IP, which could be patentable or have value as a trade secret.

The positives were certainly less obvious, and at the time we couldn’t have guessed how massive they would be.

We wrestled with the decision: prospective users and others online didn’t believe we could offer our service for such a low price, thinking that we would burn through some cash hoard and then go out of business. We wanted to reassure them, but how?

This is how our response evolved:

We’ve built a lower cost storage platform.
But why would anyone believe us?
Because, we’ve designed our own servers and they’re less expensive.
But why would anyone believe they were so low cost and efficient?
Because here’s how much they cost versus others.
But why would anyone believe they cost that little and still enabled us to efficiently store data?
Because here are all the components they’re made of, this is how to build them, and this is how they work.
Ok, you can’t argue with that.

Great — so that would reassure people. But should we do this? Is it worth it?

This was 2009, we were a tiny company of seven people working from our co-founder’s one-bedroom apartment. We decided that the risk of not having potential customers trust us was more impactful than the risk of our competitors possibly deciding to use our server architecture. The former might kill the company in short order; the latter might make it harder for us to compete in the future. Moreover, we figured that most competitors were established on their own platforms and were unlikely to switch to ours, even if it were better.

Takeaway: Build your brand today. There are no assurances you will make it to tomorrow if you can’t make people believe in you today.

A Sharing Success Story — The Backblaze Storage Pod

So with that, we decided to publish everything about the Storage Pod. As for deciding to actually open source it? That was a ‘thank you’ to the open source community upon whose shoulders we stood as we used software such as Linux, Tomcat, etc.

With eight years of hindsight, here’s what happened:

As best as I can tell, none of our direct competitors ever used our Storage Pod design, opting instead to continue paying more for commercial solutions.

  • Hundreds of press articles have been written about Backblaze as a direct result of sharing the Storage Pod design.
  • Millions of people have read press articles or our blog posts about the Storage Pods.
  • Backblaze was established as a storage tech thought leader, and a resource for those looking for information in the space.
  • Our blog became viewed as a resource, not a corporate mouthpiece.
  • Recruiting has been made easier through the awareness of Backblaze, the appreciation for us taking on challenging tech problems in interesting ways, and for our openness.
  • Sourcing for our Storage Pods has become easier because we can point potential vendors to our blog posts and say, “here’s what we need.”

And those are just the direct benefits for us. One of the things that warms my heart is that doing this has helped others:

  • Several companies have started selling servers based on our Storage Pod designs.
  • Netflix credits Backblaze with being the inspiration behind their CDN servers.
  • Many schools, labs, and others have shared that they’ve been able to do what they didn’t think was possible because using our Storage Pod designs provided lower-cost storage.
  • And I want to believe that in general we pushed forward the development of low-cost storage servers in the industry.

So overall, the decision on being transparent and sharing our Storage Pod designs was a clear win.

Takeaway: Never underestimate the value of goodwill. It can help build new markets that fuel your future growth and create new ecosystems.

Sharing An “Almost Acquisition”

Acquisition announcements are par for the course. No company, however, talks about the acquisition that fell through. If rumors appear in the press, the company’s response is always, “no comment.” But in 2010, when Backblaze was almost, but not acquired, we wrote about it in detail. Crazy?

The negatives of sharing this are slightly less obvious, but the two issues most people worried about were, 1) the fact that the company could be acquired would spook customers, and 2) the fact that it wasn’t would signal to potential acquirers that something was wrong.

So, why share this at all? No one was asking “did you almost get acquired?”

First, we had established a culture of transparency and this was a significant event that occurred for us, thus we defaulted to assuming we would share. Second, we learned that acquisitions fall through all the time, not just during the early fishing stage, but even after term sheets are signed, diligence is done, and all the paperwork is complete. I felt we had learned some things about the process that would be valuable to others that were going through it.

As it turned out, we received emails from startup founders saying they saved the post for the future, and from lawyers, VCs, and advisors saying they shared them with their portfolio companies. Among the most touching emails I received was from a founder who said that after an acquisition fell through she felt so alone that she became incredibly depressed, and that reading our post helped her see that this happens and that things could be OK after. Being transparent about almost getting acquired was worth it just to help that one founder.

And what about the concerns? As for spooking customers, maybe some were — but our sign-ups went up, not down, afterward. Any company can be acquired, and many of the world’s largest have been. That we were being both thoughtful about where to go with it, and open about it, I believe gave customers a sense that we would do the right thing if it happened. And as for signaling to potential acquirers? The ones I’ve spoken with all knew this happens regularly enough that it’s not a factor.

Takeaway: Being open and transparent is also a form of giving back to others.

Sharing Strategic Data

For years people have been desperate to know how reliable are hard drives. They could go to Amazon for individual reviews, but someone saying “this drive died for me” doesn’t provide statistical insight. Google published a study that showed annualized drive failure rates, but didn’t break down the results by manufacturer or model. Since Backblaze has deployed about 100,000 hard drives to store customer data, we have been able to collect a wealth of data on the reliability of the drives by make, model, and size. Was Backblaze the only one with this data? Of course not — Google, Amazon, Microsoft, and any other cloud-scale storage provider tracked it. Yet none would publish. Should Backblaze?

Again, starting with the main negatives: 1) sharing which drives we liked could increase demand for them, thus reducing availability or increasing prices, and 2) publishing the data might make the drive vendors unhappy with us, thereby making it difficult for us to buy drives.

But we felt that the largest drive purchasers (Amazon, Google, etc.) already had their own stats and would buy the drives they chose, and if individuals or smaller companies used our stats, they wouldn’t sufficiently move the overall market demand. Also, we hoped that the drive companies would see that we were being fair in our analysis and, if anything, would leverage our data to make drives even better.

Again, publishing the data resulted in tremendous value for Backblaze, with millions of people having read the analysis that we put out quarterly. Also, becoming known as the place to go for drive reliability information is a natural fit with being a backup and storage provider. In addition, in a twist from many people’s expectations, some of the drive companies actually started working closer with us, seeing that we could be a good source of data for them as feedback. We’ve also seen many individuals and companies make more data-based decisions on which drives to buy, and researchers have used the data for a variety of analyses.

traffic spike from hard drive reliability post

Backblaze blog analytics showing spike in readership after a hard drive stats post

Takeaway: Being open and transparent is rarely as risky as it seems.

Sharing Revenue (And Other Metrics)

Journalists always want to publish company revenue and other metrics, and private companies always shy away from sharing. For a long time we did, too. Then, we opened up about that, as well.

The negatives of sharing these numbers are: 1) external parties may otherwise perceive you’re doing better than you are, 2) if you share numbers often, you may show that growth has slowed or worse, 3) it gives your competitors info to compare their own business too.

We decided that, while some may have perceived we were bigger, our scale was plenty significant. Since we choose what we share and when, it’s up to us whether to disclose at any point. And if our competitors compare, what will they actually change that would affect us?

I did wait to share revenue until I felt I had the right person to write about it. At one point a journalist said she wouldn’t write about us unless I disclosed revenue. I suggested we had a lot to offer for the story, but didn’t want to share revenue yet. She refused to budge and I walked away from the article. Several year later, I reached out to a journalist who had covered Backblaze before and I felt understood our business and offered to share revenue with him. He wrote a deep-dive about the company, with revenue being one of the components of the story.

Sharing these metrics showed that we were at scale and running a real business, one with positive unit economics and margins, but not one where we were gouging customers.

Takeaway: Being open with the press about items typically not shared can be uncomfortable, but the press can amplify your story.

Should You Share?

For Backblaze, I believe the results of transparency have been staggering. However, it’s not for everyone. Apple has, clearly, been wildly successful taking secrecy to the extreme. In their case, early disclosure combined with the long cycle of hardware releases could significantly impact sales of current products.

“For Backblaze, I believe the results of transparency have been staggering.” — Gleb Budman

I will argue, however, that for most startups transparency wins. Most startups need to establish credibility and trust, build awareness and a fan base, show that they understand what their customers need and be useful to them, and show the soul and passion behind the company. Some startup companies try to buy these virtues with investor money, and sometimes amplifying your brand via paid marketing helps. But, authentic transparency can build awareness and trust not only less expensively, but more deeply than money can buy.

Backblaze was open from the beginning. With no outside investors, as founders we were able to express ourselves and make our decisions. And it’s easier to be a company that shares if you do it from the start, but for any company, here are a few suggestions:

  1. Ask about sharing: If something significant happens — good or bad — ask “should we share this?” If you made a tough decision, ask “should we share the thinking behind the decision and why it was tough?”
  2. Default to yes: It’s often scary to share, but look for the reasons to say ‘yes,’ not the reasons to say ‘no.’ That doesn’t mean you won’t sometimes decide not to, but make that the high bar.
  3. Minimize reviews: Press releases tend to be sanitized and boring because they’ve been endlessly wordsmithed by committee. Establish the few things you don’t want shared, but minimize the number of people that have to see anything else before it can go out. Teach, then trust.
  4. Engage: Sharing will result in comments on your blog, social, articles, etc. Reply to people’s questions and engage. It’ll make the readers more engaged and give you a better understanding of what they’re looking for.
  5. Accept mistakes: Things will become public that aren’t perfectly sanitized. Accept that and don’t punish people for oversharing.

Building a culture of a company that is open to sharing takes time, but continuous practice will build that, and over time the company will navigate its voice and approach to sharing.

The post The Decision on Transparency appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

How to Compete with Giants

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/how-to-compete-with-giants/

How to Compete with Giants

This post by Backblaze’s CEO and co-founder Gleb Budman is the sixth in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year
  6. How to Compete with Giants

Use the Join button above to receive notification of new posts in this series.

Perhaps your business is competing in a brand new space free from established competitors. Most of us, though, start companies that compete with existing offerings from large, established companies. You need to come up with a better mousetrap — not the first mousetrap.

That’s the challenge Backblaze faced. In this post, I’d like to share some of the lessons I learned from that experience.

Backblaze vs. Giants

Competing with established companies that are orders of magnitude larger can be daunting. How can you succeed?

I’ll set the stage by offering a few sets of giants we compete with:

  • When we started Backblaze, we offered online backup in a market where companies had been offering “online backup” for at least a decade, and even the newer entrants had raised tens of millions of dollars.
  • When we built our storage servers, the alternatives were EMC, NetApp, and Dell — each of which had a market cap of over $10 billion.
  • When we introduced our cloud storage offering, B2, our direct competitors were Amazon, Google, and Microsoft. You might have heard of them.

What did we learn by competing with these giants on a bootstrapped budget? Let’s take a look.

Determine What Success Means

For a long time Apple considered Apple TV to be a hobby, not a real product worth focusing on, because it did not generate a billion in revenue. For a $10 billion per year revenue company, a new business that generates $50 million won’t move the needle and often isn’t worth putting focus on. However, for a startup, getting to $50 million in revenue can be the start of a wildly successful business.

Lesson Learned: Don’t let the giants set your success metrics.

The Advantages Startups Have

The giants have a lot of advantages: more money, people, scale, resources, access, etc. Following their playbook and attacking head-on means you’re simply outgunned. Common paths to failure are trying to build more features, enter more markets, outspend on marketing, and other similar approaches where scale and resources are the primary determinants of success.

But being a startup affords many advantages most giants would salivate over. As a nimble startup you can leverage those to succeed. Let’s breakdown nine competitive advantages we’ve used that you can too.

1. Drive Focus

It’s hard to build a $10 billion revenue business doing just one thing, and most giants have a broad portfolio of businesses, numerous products for each, and targeting a variety of customer segments in multiple markets. That adds complexity and distributes management attention.

Startups get the benefit of having everyone in the company be extremely focused, often on a singular mission, product, customer segment, and market. While our competitors sell everything from advertising to Zantac, and are investing in groceries and shipping, Backblaze has focused exclusively on cloud storage. This means all of our best people (i.e. everyone) is focused on our cloud storage business. Where is all of your focus going?

Lesson Learned: Align everyone in your company to a singular focus to dramatically out-perform larger teams.

2. Use Lack-of-Scale as an Advantage

You may have heard Paul Graham say “Do things that don’t scale.” There are a host of things you can do specifically because you don’t have the same scale as the giants. Use that as an advantage.

When we look for data center space, we have more options than our largest competitors because there are simply more spaces available with room for 100 cabinets than for 1,000 cabinets. With some searching, we can find data center space that is better/cheaper.

When a flood in Thailand destroyed factories, causing the world’s supply of hard drives to plummet and prices to triple, we started drive farming. The giants certainly couldn’t. It was a bit crazy, but it let us keep prices unchanged for our customers.

Our Chief Cloud Officer, Tim, used to work at Adobe. Because of their size, any new product needed to always launch in a multitude of languages and in global markets. Once launched, they had scale. But getting any new product launched was incredibly challenging.

Lesson Learned: Use lack-of-scale to exploit opportunities that are closed to giants.

3. Build a Better Product

This one is probably obvious. If you’re going to provide the same product, at the same price, to the same customers — why do it? Remember that better does not always mean more features. Here’s one way we built a better product that didn’t require being a bigger company.

All online backup services required customers to choose what to include in their backup. We found that this was complicated for users since they often didn’t know what needed to be backed up. We flipped the model to back up everything and allow users to exclude if they wanted to, but it was not required. This reduced the number of features/options, while making it easier and better for the user.

This didn’t require the resources of a huge company; it just required understanding customers a bit deeper and thinking about the solution differently. Building a better product is the most classic startup competitive advantage.

Lesson Learned: Dig deep with your customers to understand and deliver a better mousetrap.

4. Provide Better Service

How can you provide better service? Use your advantages. Escalations from your customer care folks to engineering can go through fewer hoops. Fixing an issue and shipping can be quicker. Access to real answers on Twitter or Facebook can be more effective.

A strategic decision we made was to have all customer support people as full-time employees in our headquarters. This ensures they are in close contact to the whole company for feedback to quickly go both ways.

Having a smaller team and fewer layers enables faster internal communication, which increases customer happiness. And the option to do things that don’t scale — such as help a customer in a unique situation — can go a long way in building customer loyalty.

Lesson Learned: Service your customers better by establishing clear internal communications.

5. Remove The Unnecessary

After determining that the industry standard EMC/NetApp/Dell storage servers would be too expensive to build our own cloud storage upon, we decided to build our own infrastructure. Many said we were crazy to compete with these multi-billion dollar companies and that it would be impossible to build a lower cost storage server. However, not only did it prove to not be impossible — it wasn’t even that hard.

One key trick? Remove the unnecessary. While EMC and others built servers to sell to other companies for a wide variety of use cases, Backblaze needed servers that only Backblaze would run, and for a single use case. As a result we could tailor the servers for our needs by removing redundancy from each server (since we would run redundant servers), and using lower-performance components (since we would get high-performance by running parallel servers).

What do your customers and use cases not need? This can trim costs and complexity while often improving the product for your use case.

Lesson Learned: Don’t think “what can we add” to what the giants offer — think “what can we remove.”

6. Be Easy

How many times have you visited a large company website, particularly one that’s not consumer-focused, only to leave saying, “Huh? I don’t understand what you do.” Keeping your website clear, and your product and pricing simple, will dramatically increase conversion and customer satisfaction. If you’re able to make it 2x easier and thus increasing your conversion by 2x, you’ve just allowed yourself to spend ½ as much acquiring a customer.

Providing unlimited data backup wasn’t specifically about providing more storage — it was about making it easier. Since users didn’t know how much data they needed to back up, charging per gigabyte meant they wouldn’t know the cost. Providing unlimited data backup meant they could just relax.

Customers love easy — and being smaller makes easy easier to deliver. Use that as an advantage in your website, marketing materials, pricing, product, and in every other customer interaction.

Lesson Learned: Ease-of-use isn’t a slogan: it’s a competitive advantage. Treat it as seriously as any other feature of your product

7. Don’t Be Afraid of Risk

Obviously unnecessary risks are unnecessary, and some risks aren’t worth taking. However, large companies that have given guidance to Wall Street with a $0.01 range on their earning-per-share are inherently going to be very risk-averse. Use risk-tolerance to open up opportunities, and adjust your tolerance level as you scale. In your first year, there are likely an infinite number of ways your business may vaporize; don’t be too worried about taking a risk that might have a 20% downside when the upside is hockey stick growth.

Using consumer-grade hard drives in our servers may have caused pain and suffering for us years down-the-line, but they were priced at approximately 50% of enterprise drives. Giants wouldn’t have considered the option. Turns out, the consumer drives performed great for us.

Lesson Learned: Use calculated risks as an advantage.

8. Be Open

The larger a company grows, the more it wants to hide information. Some of this is driven by regulatory requirements as a public company. But most of this is cultural. Sharing something might cause a problem, so let’s not. All external communication is treated as a critical press release, with rounds and rounds of editing by multiple teams and approvals. However, customers are often desperate for information. Moreover, sharing information builds trust, understanding, and advocates.

I started blogging at Backblaze before we launched. When we blogged about our Storage Pod and open-sourced the design, many thought we were crazy to share this information. But it was transformative for us, establishing Backblaze as a tech thought leader in storage and giving people a sense of how we were able to provide our service at such a low cost.

Over the years we’ve developed a culture of being open internally and externally, on our blog and with the press, and in communities such as Hacker News and Reddit. Often we’ve been asked, “why would you share that!?” — but it’s the continual openness that builds trust. And that culture of openness is incredibly challenging for the giants.

Lesson Learned: Overshare to build trust and brand where giants won’t.

9. Be Human

As companies scale, typically a smaller percent of founders and executives interact with customers. The people who build the company become more hidden, the language feels “corporate,” and customers start to feel they’re interacting with the cliche “faceless, nameless corporation.” Use your humanity to your advantage. From day one the Backblaze About page listed all the founders, and my email address. While contacting us shouldn’t be the first path for a customer support question, I wanted it to be clear that we stand behind the service we offer; if we’re doing something wrong — I want to know it.

To scale it’s important to have processes and procedures, but sometimes a situation falls outside of a well-established process. While we want our employees to follow processes, they’re still encouraged to be human and “try to do the right thing.” How to you strike this balance? Simon Sinek gives a good talk about it: make your employees feel safe. If employees feel safe they’ll be human.

If your customer is a consumer, they’ll appreciate being treated as a human. Even if your customer is a corporation, the purchasing decision-makers are still people.

Lesson Learned: Being human is the ultimate antithesis to the faceless corporation.

Build Culture to Sustain Your Advantages at Scale

Presumably the goal is not to always be competing with giants, but to one day become a giant. Does this mean you’ll lose all of these advantages? Some, yes — but not all. Some of these advantages are cultural, and if you build these into the culture from the beginning, and fight to keep them as you scale, you can keep them as you become a giant.

Tesla still comes across as human, with Elon Musk frequently interacting with people on Twitter. Apple continues to provide great service through their Genius Bar. And, worst case, if you lose these at scale, you’ll still have the other advantages of being a giant such as money, people, scale, resources, and access.

Of course, some new startup will be gunning for you with grand ambitions, so just be sure not to get complacent. 😉

The post How to Compete with Giants appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Surviving Your First Year

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/startup-stages-surviving-your-first-year/

Surviving Your First Year

This post by Backblaze’s CEO and co-founder Gleb Budman is the fifth in a series about entrepreneurship. You can choose posts in the series from the list below:

  1. How Backblaze got Started: The Problem, The Solution, and the Stuff In-Between
  2. Building a Competitive Moat: Turning Challenges Into Advantages
  3. From Idea to Launch: Getting Your First Customers
  4. How to Get Your First 1,000 Customers
  5. Surviving Your First Year

Use the Join button above to receive notification of new posts in this series.

In my previous posts, I talked about coming up with an idea, determining the solution, and getting your first customers. But you’re building a company, not a product. Let’s talk about what the first year should look like.

The primary goals for that first year are to: 1) set up the company; 2) build, launch, and learn; and 3) survive.

Setting Up the Company

The company you’re building is more than the product itself, and you’re not going to do it alone. You don’t want to spend too much time on this since getting customers is key, but if you don’t set up the basics, there are all sorts of issues down the line.

startup idea board

Find Your Co-Founders & Determine Roles

You may already have the idea, but who do you need to execute it? At Backblaze, we needed people to build the web experience, the client backup application, and the server/storage side. We also needed someone to handle the business/marketing aspects, and we felt that the design and user experience were critical. As a result, we started with five co-founders: three engineers, a designer, and me for the business and marketing.

Of course not every role needs to be filled by a co-founder. You can hire employees for positions as well. But think through the strategic skills you’ll need to launch and consider co-founders with those skill sets.

Too many people think they can just “work together” on everything. Don’t. Determine roles as quickly as possible so that it’s clear who is responsible for what work and which decisions. We were lucky in that we had worked together and thus knew what each person would do, but even so we assigned titles early on to clarify roles.

Takeaway:   Fill critical roles and explicitly split roles and responsibilities.

Get Your Legal Basics In Place

When we’re excited about building a product, legal basics are often the last thing we want to deal with. You don’t need to go overboard, but it’s critical to get certain things done.

  1. Determine ownership split. What is the percentage breakdown of the company that each of the founders will own? It can be a tough discussion, but it only becomes more difficult later when there is more value and people have put more time into it. At Backblaze we split the equity equally five ways. This is uncommon. The benefit of this is that all the founders feel valued and “in it together.” The benefit of the more common split where someone has a dominant share is that person is typically empowered to be the ultimate decision-maker. Slicing Pie provides some guidance on how to think about splitting equity. Regardless of which way you want you go, don’t put it off.
  2. Incorporate. Hard to be a company if you’re not. There are various formats, but if you plan to raise angel/venture funding, a Delaware-based C-corp is standard.
  3. Deal With Stock. At a minimum, issue stock to the founders, have each one buy their shares, and file an 83(b). Buying your shares at this stage might be $100. Filing the 83(b) election marks the date at which you purchased your shares, and shows that you bought them for what they were worth. This one piece of paper paper can make the difference between paying long-term capital gains rates (~20%) or income tax rates (~40%).
  4. Assign Intellectual Property. Ask everyone to sign a Proprietary Information and Inventions Assignment (“PIIA”). This document says that what they do at the company is owned by the company. Early on we had a friend who came by and brainstormed ideas. We thought of it as interesting banter. He later said he owned part of our storage design. While we worked it out together, a PIIA makes ownership clear.

The ownership split can be worked out by the founders directly. For the other items, I would involve lawyers. Some law firms will set up the basics and defer payment until you raise money or the business can pay for services out of operations. Gunderson Dettmer did that for us (ask for Bennett Yee). Cooley will do this on a casey-by-case basis as well.

Takeaway:  Don’t let the excitement of building a company distract you from filing the basic legal documents required to protect and grow your company.

Get Health Insurance

This item may seem out of place, but not having health insurance can easily bankrupt you personally, and that certainly won’t bode well for your company. While you can buy individual health insurance, it will often be less expensive to buy it as a company. Also, it will make recruiting employees more difficult if you do not offer healthcare. When we contacted brokers they asked us to send the W-2 of each employee that wanted coverage, but the founders weren’t taking a salary at first. To work around this, make the founders ‘officers’ of the company, and the healthcare brokers can then insure them. (Of course, you need to be ok with your co-founders being officers, but hopefully, that is logical anyway.)

Takeaway:  Don’t take your co-founders’ physical and financial health for granted. Health insurance can serve as both individual protection and a recruiting tool for future employees.

Building, Launching & Learning

Getting the company set up gives you the foundation, but ultimately a company with no product and no customers isn’t very interesting.

Build

Ideally, you have one person on the team focusing on all of the items above and everyone else can be heads-down building product. There is a lot to say about building product, but for this post, I’ll just say that your goal is to get something out the door that is good enough to start collecting feedback. It doesn’t have to have every feature you dream of and doesn’t have to support 1 billion users on day one.

Launch

If you’re building a car or rocket, that may take some time. But with the availability of open-source software and cloud services, most startups should launch inside of a year.

Launching forces a scoping of the feature set to what’s critical, rallies the company around a goal, starts building awareness of your company and solution, and pushes forward the learning process. Backblaze launched in public beta on June 2, 2008, eight months after the founders all started working on it full-time.

Takeaway:  Focus on the most important features and launch.

Learn & Iterate

As much as we think we know about the customers and their needs, the launch process and beyond opens up all sorts of insights. This early period is critical to collect feedback and iterate, especially while both the product and company are still quite malleable. We initially planned on building peer-to-peer and local backup immediately on the heels of our online offering, but after launching found minimal demand for those features. On the other hand, there was tremendous demand from companies and resellers.

Takeaway:  Use the critical post-launch period to collect feedback and iterate.

Surviving

“Live to fight another day.” If the company doesn’t survive, it’s hard to change the world. Let’s talk about some of the survival components.

Consider What You As A Founding Team Want & How You Work

Are you doing this because you hope to get rich? See yourself on the cover of Fortune? Make your own decisions? Work from home all the time? Founder fighting is the number one reason companies fail; the founders need to be on the same page as much as possible.

At Backblaze we agreed very early on that we wanted three things:

  1. Build products we were proud of
  2. Have fun
  3. Make money

This has driven various decisions over the years and has evolved into being part of the culture. For example, while Backblaze is absolutely a company with a profit motive, we do not compromise the product to make more money. Other directions are not bad; they’re just different.

Do you want a lifestyle business? Or want to build a billion dollar business? Want to run it forever or build it for a couple years and do something else?

Pretend you’re getting married to each other. Do some introspection and talk about your vision of the future a lot. Do you expect everyone to work 20 or 100 hours every week? In the office or remote? How do you like to work? What pet peeves do you have?

When getting married each person brings the “life they’ve known,” often influenced by the life their parents lived. Together they need to decide which aspects of their previous lives they want to keep, toss, or change. As founders coming together, you have the same opportunity for your new company.

Takeaway:  In order for a company to survive, the founders must agree on what they want the company to be. Have the discussions early.

Determine How You Will Fund Your Business

Raising venture capital is often seen as the only path, and considered the most important thing to start doing on day one. However, there are a variety of options for funding your business, including using money from savings, part-time work, friends & family money, loans, angels, and customers. Consider the right option for you, your founding team, and your business.

Conserve Cash

Whichever option you choose for funding your business, chances are high that you will not be flush with cash on day one. In certain situations, you actually don’t want to conserve cash because you’ve raised $100m and now you want to run as fast as you can to capture a market — cash is plentiful and time is not. However, with the exception of founder struggles, running out of cash is the most common way companies go under. There are many ways to conserve cash — limit hiring of employees and consultants, use lawyers and accountants sparingly, don’t spend on advertising, work from a home office, etc. The most important way is to simply ensure that you and your team are cash conscious, challenging decisions that commit you to spending cash.

Backblaze spent a total of $94,122 to get to public beta launch. That included building the backup application, our own server infrastructure, the website with account/billing/restore functionality, the marketing involved in getting to launch, and all the steps above in setting up the company, paying for healthcare, etc. The five founders took no salary during this time (which, of course, would have cost dramatically more), so most of this money went to computers, servers, hard drives, and other infrastructure.

Takeaway:  Minimize cash burn — it extends your runway and gives you options.

Slowly Flesh Out Your Team

We started with five co-founders, and thus a fairly fleshed-out team. A year in, we only added one person, a Mac architect. Three months later we shipped a beta of our Mac version, which has resulted in more than 50% of our revenue.

Minimizing hiring is key to cash conservation, and hiring ahead of getting market feedback is risky since you may realize that the talent you need will change. However, once you start getting feedback, think about the key people that you need to move your company forward. But be rigorous in determining whether they’re critical. We didn’t hire our first customer support person until all five founders were spending 20% of their time on it.

Takeaway:  Don’t hire in anticipation of market growth; hire to fuel the growth.

Keep Your Spirits Up

Startups are roller coasters of emotion. There have been some serious articles about founders suffering from depression and worse. The idea phase is exhilarating, then there is the slog of building. The launch is a blast, but the week after there are crickets.

On June 2, 2008, we launched in public beta with great press and hordes of customers. But a few months later we were signing up only about 10 new customers per month. That’s $50 new monthly recurring revenue (MRR) after a year of work and no salary.

On August 25, 2008, we brought on our Mac architect. Two months later, on October 26, 2008, Apple launched Time Machine — completely free and built-in backup for all Macs.

There were plenty of times when our prospects looked bleak. In the rearview mirror it’s easy to say, “well sure, but now you have lots of customers,” or “yes, but Time Machine doesn’t do cloud backup.” But at the time neither of these were a given.

Takeaway:  Getting up each day and believing that as a team you’ll figure it out will let you get to the point where you can look in the rearview mirror and say, “It looked bleak back then.”

Succeeding in Your First Year

I titled the post “Surviving Your First Year,” but if you manage to, 1) set up the company; 2) build, launch, and learn; and 3) survive, you will have done more than survive: you’ll have truly succeeded in your first year.

The post Surviving Your First Year appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

An Invitation for CrashPlan Customers: Try Backblaze

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/crashplan-alternative-backup-solution/

Welcome CrashPlan Users

When CrashPlan announced the decision a little over a year ago to terminate their consumer backup, we published the post below. We are republishing it today for any, now former, CrashPlan customers who are looking for a new backup provider. We hope you’ll give Backblaze a shot!

With news that CrashPlan is exiting the consumer market, we know some of you may be considering which backup provider to call home. We welcome you to try us.

For over a decade, Backblaze has provided unlimited cloud backup for Windows and Macintosh computers at $5 per month (or $50 per year).

“Backblaze is excellent if you’re looking for the cheapest online backup option that still offers serious file protection.” — Dann Berg, Tom’s Guide

That’s it. Ready to make sure your data is safe? Try Backblaze for free — it’ll take you less than a minute and you don’t need a credit card to start protecting your data.

Our customers don’t have to choose between competing feature sets or hard to understand fine print. There are no extra charges and no limits on the size of your files — no matter how many videos you want to back up. And when we say unlimited, we mean unlimited; there are no restrictions on files, gigabytes, or restores. Customers also love the choices they have for getting their data back — web, mobile apps, and our free Restore by Mail option. We’re also the fastest to back up your data. While other services throttle your upload speeds, we want to get you protected as quickly as possible.

Backblaze vs Carbonite

We know that CrashPlan is encouraging customers to look at Carbonite as an alternative. We would like to offer you another option: Backblaze. We cost less, we offer more, we store over 600 petabytes of data, we have restored over 30 billion files, and customers in over 120 countries around the world trust us with their data.

BackblazeCarbonite BasicCarbonite Prime
Price per Computer$50/year$71.99/year$149.99/year
Back Up All User Data By Default – No Picking And ChoosingYesNoNo
Automatically Back Up Files Of Any Size, Including VideosYesNoYes1
Back Up Multiple USB External Hard DrivesYesNoNo
Restore by Mail for FreeYesNoNo
Restore Older Versions of Files for Mac or PCYesNo2No2
Locate ComputerYesNoNo
Manage Families & TeamsYesNoNo
Protect Accounts Via Two Factor Verification, SMS & Authenticator AppsYesNoNo
Protect Data Via Private Encryption KeyYesNoNo2
(1) All videos and files over 4GB require manual selection.  (2) Available on Windows Only

To get just some of the features offered by Backblaze for $50/year, you would need to purchase Carbonite Prime at $149.99/year.

You can view a current pricing comparison table on our website.

Reminder: Sync is Not Backup

“Backblaze is my favorite online backup service, mostly because everything about it is so simple, especially its pricing and software.” — Tim Fisher, Lifewire: 22 Online Backup Services Reviewed

Of course, there are plenty of options in the marketplace. We encourage you to choose one to make sure you stay backed up. One thing we tell our own friends and family: sync is not backup.

If you’re considering using a sync service — Dropbox, Google Drive, OneDrive, iCloud, etc. — you should know that these services are not designed to back up all your data. Typically, they only sync data from a specific directory or folder. If the service detects a file was deleted from your sync folder, it also will delete it from their server, and you’re out of luck. In addition, most don’t support external drives and have tiered pricing that gets quite expensive.

Backblaze is the Simple, Reliable, and Affordable Choice for Unlimited Backup of All Your Data

People have trusted Backblaze to protect their digital photos, music, movies, and documents for the past 11 years. We look forward to doing the same for your valuable data.

You have just a few days until the end-of-service for CrashPlan Home on October 22, 2018. But there’s no reason to wait until your data is at risk. Try Backblaze for FREE today — all you need to do is pick an email/password and click download.

Read our FAQ for CrashPlan Users

You’ll find answers to the questions below and more by reading our FAQ.

➤  FAQ — Top Questions from CrashPlan Users

Also, don’t miss a blog post that current CrashPlan users might find useful:

➤  How to Migrate All of Your Data from CrashPlan

The post An Invitation for CrashPlan Customers: Try Backblaze appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

How To Get Your First 1,000 Customers

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/how-to-get-your-first-1000-customers/

PR for getting your first 1000 customers

If you launch your startup and no one knows, did you actually launch? As mentioned in my last post, our initial launch target was to get a 1,000 people to use our service. But how do you get even 1,000 people to sign up for your service when no one knows who you are?

There are a variety of methods to attract your first 1,000 customers, but launching with the press is my favorite. I’ll explain why and how to do it below.

Paths to Attract Your First 1,000 Customers

Social following: If you have a massive social following, those people are a reasonable target for what you’re offering. In particular if your relationship with them is one where they would buy something you recommend, this can be one of the easiest ways to get your initial customers. However, building this type of following is non-trivial and often is done over several years.

Press not only provides awareness and customers, but credibility and SEO benefits as well

Paid advertising: The advantage of paid ads is you have control over when they are presented and what they say. The primary disadvantage is they tend to be expensive, especially before you have your positioning, messaging, and funnel nailed.

Viral: There are certainly examples of companies that launched with a hugely viral video, blog post, or promotion. While fantastic if it happens, even if you do everything right, the likelihood of massive virality is miniscule and the conversion rate is often low.

Press: As I said, this is my favorite. You don’t need to pay a PR agency and can go from nothing to launched in a couple weeks. Press not only provides awareness and customers, but credibility and SEO benefits as well.

How to Pitch the Press

It’s easy: Have a compelling story, find the right journalists, make their life easy, pitch and follow-up. Of course, each one of those has some nuance, so let’s dig in.

Have a compelling story

How to Get AttentionWhen you’ve been working for months on your startup, it’s easy to get lost in the minutiae when talking to others. Stories that a journalist will write about need to be something their readers will care about. Knowing what story to tell and how to tell it is part science and part art. Here’s how you can get there:

The basics of your story

Ask yourself the following questions, and write down the answers:

  • What are we doing? What product service are we offering?
  • Why? What problem are we solving?
  • What is interesting or unique? Either about what we’re doing, how we’re doing it, or for who we’re doing it.

“But my story isn’t that exciting”

Neither was announcing a data backup company, believe me. Look for angles that make it compelling. Here are some:

  • Did someone on your team do something major before? (build a successful company/product, create some innovation, market something we all know, etc.)
  • Do you have an interesting investor or board member?
  • Is there a personal story that drove you to start this company?
  • Are you starting it in a unique place?
  • Did you come upon the idea in a unique way?
  • Can you share something people want to know that’s not usually shared?
  • Are you partnered with a well-known company?
  • …is there something interesting/entertaining/odd/shocking/touching/etc.?

It doesn’t get much less exciting than, “We’re launching a company that will backup your data.” But there were still a lot of compelling stories:

  • Founded by serial entrepreneurs, bootstrapped a capital-intensive company, committed to each other for a year without salary.
  • Challenging the way that every backup company before was set up by not asking customers to pick and choose files to backup.
  • Designing our own storage system.
  • Etc. etc.

For the initial launch, we focused on “unlimited for $5/month” and statistics from a survey we ran with Harris Interactive that said that 94% of people did not regularly backup their data.

It’s an old adage that “Everyone has a story.” Regardless of what you’re doing, there is always something interesting to share. Dig for that.

The headline

Once you’ve captured what you think the interesting story is, you’ve got to boil it down. Yes, you need the elevator pitch, but this is shorter…it’s the headline pitch. Write the headline that you would love to see a journalist write.

Regardless of what you’re doing, there is always something interesting to share. Dig for that.

Now comes the part where you have to be really honest with yourself: if you weren’t involved, would you care?

The “Techmeme Test”

One way I try to ground myself is what I call the “Techmeme Test”. Techmeme lists the top tech articles. Read the headlines. Imagine the headline you wrote in the middle of the page. If you weren’t involved, would you click on it? Is it more or less compelling than the others. Much of tech news is dominated by the largest companies. If you want to get written about, your story should be more compelling. If not, go back above and explore your story some more.

Embargoes, exclusives and calls-to-action

Journalists write about news. Thus, if you’ve already announced something and are then pitching a journalist to cover it, unless you’re giving her something significant that hasn’t been said, it’s no longer news. As a result, there are ‘embargoes’ and ‘exclusives’.

Embargoes

    • : An embargo simply means that you are sharing news with a journalist that they need to keep private until a certain date and time.

If you’re Apple, this may be a formal and legal document. In our case, it’s as simple as saying, “Please keep embargoed until 4/13/17 at 8am California time.” in the pitch. Some sites explicitly will not keep embargoes; for example The Information will only break news. If you want to launch something later, do not share information with journalists at these sites. If you are only working with a single journalist for a story, and your announcement time is flexible, you can jointly work out a date and time to announce. However, if you have a fixed launch time or are working with a few journalists, embargoes are key.

Exclusives: An exclusive means you’re giving something specifically to that journalist. Most journalists love an exclusive as it means readers have to come to them for the story. One option is to give a journalist an exclusive on the entire story. If it is your dream journalist, this may make sense. Another option, however, is to give exclusivity on certain pieces. For example, for your launch you could give an exclusive on funding detail & a VC interview to a more finance-focused journalist and insight into the tech & a CTO interview to a more tech-focused journalist.

Call-to-Action: With our launch we gave TechCrunch, Ars Technica, and SimplyHelp URLs that gave the first few hundred of their readers access to the private beta. Once those first few hundred users from each site downloaded, the beta would be turned off.

Thus, we used a combination of embargoes, exclusives, and a call-to-action during our initial launch to be able to brief journalists on the news before it went live, give them something they could announce as exclusive, and provide a time-sensitive call-to-action to the readers so that they would actually sign up and not just read and go away.

How to Find the Most Authoritative Sites / Authors

“If a press release is published and no one sees it, was it published?” Perhaps the time existed when sending a press release out over the wire meant journalists would read it and write about it. That time has long been forgotten. Over 1,000 unread press releases are published every day. If you want your compelling story to be covered, you need to find the handful of journalists that will care.

Determine the publications

Find the publications that cover the type of story you want to share. If you’re in tech, Techmeme has a leaderboard of publications ranked by leadership and presence. This list will tell you which publications are likely to have influence. Visit the sites and see if your type of story appears on their site. But, once you’ve determined the publication do NOT send a pitch their “[email protected]” or “[email protected]” email addresses. In all the times I’ve done that, I have never had a single response. Those email addresses are likely on every PR, press release, and spam list and unlikely to get read. Instead…

Determine the journalists

Once you’ve determined which publications cover your area, check which journalists are doing the writing. Skim the articles and search for keywords and competitor names.

Over 1,000 unread press releases are published every day.

Identify one primary journalist at the publication that you would love to have cover you, and secondary ones if there are a few good options. If you’re not sure which one should be the primary, consider a few tests:

  • Do they truly seem to care about the space?
  • Do they write interesting/compelling stories that ‘get it’?
  • Do they appear on the Techmeme leaderboard?
  • Do their articles get liked/tweeted/shared and commented on?
  • Do they have a significant social presence?

Leveraging Google

Google author search by date

In addition to Techmeme or if you aren’t in the tech space Google will become a must have tool for finding the right journalists to pitch. Below the search box you will find a number of tabs. Click on Tools and change the Any time setting to Custom range. I like to use the past six months to ensure I find authors that are actively writing about my market. I start with the All results. This will return a combination of product sites and articles depending upon your search term.

Scan for articles and click on the link to see if the article is on topic. If it is find the author’s name. Often if you click on the author name it will take you to a bio page that includes their Twitter, LinkedIn, and/or Facebook profile. Many times you will find their email address in the bio. You should collect all the information and add it to your outreach spreadsheet. Click here to get a copy. It’s always a good idea to comment on the article to start building awareness of your name. Another good idea is to Tweet or Like the article.

Next click on the News tab and set the same search parameters. You will get a different set of results. Repeat the same steps. Between the two searches you will have a list of authors that actively write for the websites that Google considers the most authoritative on your market.

How to find the most socially shared authors

Buzzsumo search for most shared by date

Your next step is to find the writers whose articles get shared the most socially. Go to Buzzsumo and click on the Most Shared tab. Enter search terms for your market as well as competitor names. Again I like to use the past 6 months as the time range. You will get a list of articles that have been shared the most across Facebook, LinkedIn, Twitter, Pinterest, and Google+. In addition to finding the most shared articles and their authors you can also see some of the Twitter users that shared the article. Many of those Twitter users are big influencers in your market so it’s smart to start following and interacting with them as well as the authors.

How to Find Author Email Addresses

Some journalists publish their contact info right on the stories. For those that don’t, a bit of googling will often get you the email. For example, TechCrunch wrote a story a few years ago where they published all of their email addresses, which was in response to this new service that charges a small fee to provide journalist email addresses. Sometimes visiting their twitter pages will link to a personal site, upon which they will share an email address.

Of course all is not lost if you don’t find an email in the bio. There are two good services for finding emails, https://app.voilanorbert.com/ and https://hunter.io/. For Voila Norbert enter the author name and the website you found their article on. The majority of the time you search for an author on a major publication Norbert will return an accurate email address. If it doesn’t try Hunter.io.

On Hunter.io enter the domain name and click on Personal Only. Then scroll through the results to find the author’s email. I’ve found Norbert to be more accurate overall but between the two you will find most major author’s email addresses.

Email, by the way, is not necessarily the best way to engage a journalist. Many are avid Twitter users. Follow them and engage – that means read/retweet/favorite their tweets; reply to their questions, and generally be helpful BEFORE you pitch them. Later when you email them, you won’t be just a random email address.

Don’t spam

Now that you have all these email addresses (possibly thousands if you purchased a list) – do NOT spam. It is incredibly tempting to think “I could try to figure out which of these folks would be interested, but if I just email all of them, I’ll save myself time and be more likely to get some of them to respond.” Don’t do it.

Follow them and engage – that means read/retweet/favorite their tweets; reply to their questions, and generally be helpful BEFORE you pitch them.

First, you’ll want to tailor your pitch to the individual. Second, it’s a small world and you’ll be known as someone who spams – reputation is golden. Also, don’t call journalists. Unless you know them or they’ve said they’re open to calls, you’re most likely to just annoy them.

Build a relationship

Build Trust with reportersPlay the long game. You may be focusing just on the launch and hoping to get this one story covered, but if you don’t quickly flame-out, you will have many more opportunities to tell interesting stories that you’ll want the press to cover. Be honest and don’t exaggerate.
When you have 500 users it’s tempting to say, “We’ve got thousands!” Don’t. The good journalists will see through it and it’ll likely come back to bite you later. If you don’t know something, say “I don’t know but let me find out for you.” Most journalists want to write interesting stories that their readers will appreciate. Help them do that. Build deeper relationships with 5 – 10 journalists, rather than spamming thousands.

Stay organized

It doesn’t need to be complicated, but keep a spreadsheet that includes the name, publication, and contact info of the journalists you care about. Then, use it to keep track of who you’ve pitched, who’s responded, whether you’ve sent them the materials they need, and whether they intend to write/have written.

Make their life easy

Journalists have a million PR people emailing them, are actively engaging with readers on Twitter and in the comments, are tracking their metrics, are working their sources…and all the while needing to publish new articles. They’re busy. Make their life easy and they’re more likely to engage with yours.

Get to know them

Before sending them a pitch, know what they’ve written in the space. If you tell them how your story relates to ones they’ve written, it’ll help them put the story in context, and enable them to possibly link back to a story they wrote before.

Prepare your materials

Journalists will need somewhere to get more info (prepare a fact sheet), a URL to link to, and at least one image (ideally a few to choose from.) A fact sheet gives bite-sized snippets of information they may need about your startup or product: what it is, how big the market is, what’s the pricing, who’s on the team, etc. The URL is where their reader will get the product or more information from you. It doesn’t have to be live when you’re pitching, but you should be able to tell what the URL will be. The images are ones that they could embed in the article: a product screenshot, a CEO or team photo, an infographic. Scan the types of images included in their articles. Don’t send any of these in your pitch, but have them ready. Studies, stats, customer/partner/investor quotes are also good to have.

Pitch

A pitch has to be short and compelling.

Subject Line

Think back to the headline you want. Is it really compelling? Can you shorten it to a subject line? Include what’s happening and when. For Mike Arrington at Techcrunch, our first subject line was “Startup doing an ‘online time machine’”. Later I would include, “launching June 6th”.

For John Timmer at ArsTechnica, it was “Demographics data re: your 4/17 article”. Why? Because he wrote an article titled “WiFi popular with the young people; backups, not so much”. Since we had run a demographics survey on backups, I figured as a science editor he’d be interested in this additional data.

Body

A few key things about the body of the email. It should be short and to the point, no more than a few sentences. Here was my actual, original pitch email to John:

Hey John,

We’re launching Backblaze next week which provides a Time Machine-online type of service. As part of doing some research I read your article about backups not being popular with young people and that you had wished Accenture would have given you demographics. In prep for our invite-only launch I sponsored Harris Interactive to get demographic data on who’s doing backups and if all goes well, I should have that data on Friday.

Next week starts Backup Awareness Month (and yes, probably Clean Your House Month and Brush Your Teeth Month)…but nonetheless…good time to remind readers to backup with a bit of data?

Would you be interested in seeing/talking about the data when I get it?

Would you be interested in getting a sneak peak at Backblaze? (I could give you some invite codes for your readers as well.)

Gleb Budman        

CEO and Co-Founder

Backblaze, Inc.

Automatic, Secure, High-Performance Online Backup

Cell: XXX-XXX-XXXX

The Good: It said what we’re doing, why this relates to him and his readers, provides him information he had asked for in an article, ties to something timely, is clearly tailored for him, is pitched by the CEO and Co-Founder, and provides my cell.

The Bad: It’s too long.

I got better later. Here’s an example:

Subject: Does temperature affect hard drive life?

Hi Peter, there has been much debate about whether temperature affects how long a hard drive lasts. Following up on the Backblaze analyses of how long do drives last & which drives last the longest (that you wrote about) we’ve now analyzed the impact of heat on the nearly 40,000 hard drives we have and found that…

We’re going to publish the results this Monday, 5/12 at 5am California-time. Want a sneak peak of the analysis?

Timing

A common question is “When should I launch?” What day, what time? I prefer to launch on Tuesday at 8am California-time. Launching earlier in the week gives breathing room for the news to live longer. While your launch may be a single article posted and that’s that, if it ends up a larger success, earlier in the week allows other journalists (including ones who are in other countries) to build on the story. Monday announcements can be tough because the journalists generally need to have their stories finished by Friday, and while ideally everything is buttoned up beforehand, startups sometimes use the weekend as overflow before a launch.

The 8am California-time is because it allows articles to be published at the beginning of the day West Coast and around lunch-time East Coast. Later and you risk it being past publishing time for the day. We used to launch at 5am in order to be morning for the East Coast, but it did not seem to have a significant benefit in coverage or impact, but did mean that the entire internal team needed to be up at 3am or 4am. Sometimes that’s critical, but I prefer to not burn the team out when it’s not.

Finally, try to stay clear of holidays, major announcements and large conferences. If Apple is coming out with their next iPhone, many of the tech journalists will be busy at least a couple days prior and possibly a week after. Not always obvious, but if you can, find times that are otherwise going to be slow for news.

Follow-up

There is a fine line between persistence and annoyance. I once had a journalist write me after we had an announcement that was covered by the press, “Why didn’t you let me know?! I would have written about that!” I had sent him three emails about the upcoming announcement to which he never responded.

My general rule is 3 emails.

Ugh. However, my takeaway from this isn’t that I should send 10 emails to every journalist. It’s that sometimes these things happen.

My general rule is 3 emails. If I’ve identified a specific journalist that I think would be interested and have a pitch crafted for her, I’ll send her the email ideally 2 weeks prior to the announcement. I’ll follow-up a week later, and one more time 2 days prior. If she ever says, “I’m not interested in this topic,” I note it and don’t email her on that topic again.

If a journalist wrote, I read the article and engage in the comments (or someone on our team, such as our social guy, @YevP does). We’ll often promote the story through our social channels and email our employees who may choose to share the story as well. This helps us, but also helps the journalist get their story broader reach. Again, the goal is to build a relationship with the journalists your space. If there’s something relevant to your customers that the journalist wrote, you’re providing a service to your customers AND helping the journalist get the word out about the article.

At times the stories also end up shared on sites such as Hacker News, Reddit, Slashdot, or become active conversations on Twitter. Again, we try to engage there and respond to questions (when we do, we are always clear that we’re from Backblaze.)

And finally, I’ll often send a short thank you to the journalist.

Getting Your First 1,000 Customers With Press

As I mentioned at the beginning, there is more than one way to get your first 1,000 customers. My favorite is working with the press to share your story. If you figure out your compelling story, find the right journalists, make their life easy, pitch and follow-up, you stand a high likelyhood of getting coverage and customers. Better yet, that coverage will provide credibility for your company, and if done right, will establish you as a resource for the press for the future.

Like any muscle, this process takes working out. The first time may feel a bit daunting, but just take the steps one at a time. As you do this a few times, the process will be easier and you’ll know who to reach out and quickly determine what stories will be compelling.

The post How To Get Your First 1,000 Customers appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

From Idea to Launch: Getting Your First Customers

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/how-to-get-your-first-customers/

line outside of Apple

After deciding to build an unlimited backup service and developing our own storage platform, the next step was to get customers and feedback. Not all customers are created equal. Let’s talk about the types, and when and how to attract them.

How to Get Your First Customers

First Step – Don’t Launch Publicly
Launch when you’re ready for the judgments of people who don’t know you at all. Until then, don’t launch. Sign up users and customers either that you know, those you can trust to cut you some slack (while providing you feedback), or at minimum those for whom you can set expectations. For months the Backblaze website was a single page with no ability to get the product and minimal info on what it would be. This is not to counter the Lean Startup ‘iterate quickly with customer feedback’ advice. Rather, this is an acknowledgement that there are different types of feedback required based on your development stage.

Sign Up Your Friends
We knew all of our first customers; they were friends, family, and previous co-workers. Many knew what we were up to and were excited to help us. No magic marketing or tech savviness was required to reach them – we just asked that they try the service. We asked them to provide us feedback on their experience and collected it through email and conversations. While the feedback wasn’t unbiased, it was nonetheless wide-ranging, real, and often insightful. These people were willing to spend time carefully thinking about their feedback and delving deeper into the conversations.

Broaden to Beta
Unless you’re famous or your service costs $1 million per customer, you’ll probably need to expand quickly beyond your friends to build a business – and to get broader feedback. Our next step was to broaden the customer base to beta users.

Opening up the service in beta provides three benefits:

  1. Air cover for the early warts. There are going to be issues, bugs, unnecessarily complicated user flows, and poorly worded text. Beta tells people, “We don’t consider the product ‘done’ and you should expect some of these issues. Please be patient with us.”
  2. A request for feedback. Some people always provide feedback, but beta communicates that you want it.
  3. An awareness opportunity. Opening up in beta provides an early (but not only) opportunity to have an announcement and build awareness.

Pitching Beta to Press
Not all press cares about, or is even willing to cover, beta products. Much of the mainstream press wants to write about services that are fully live, have scale, and are important in the marketplace. However, there are a number of sites that like to cover the leading edge – and that means covering betas. Techcrunch, Ars Technica, and SimpleHelp covered our initial private beta launch. I’ll go into the details of how to work with the press to cover your announcements in a post next month.

Private vs. Public Beta
Both private and public beta provide all three of the benefits above. The difference between the two is that private betas are much more controlled, whereas public ones bring in more users. But this isn’t an either/or – I recommend doing both.

Private Beta
For our original beta in 2008, we decided that we were comfortable with about 1,000 users subscribing to our service. That would provide us with a healthy amount of feedback and get some early adoption, while not overwhelming us or our server capacity, and equally important not causing cash flow issues from having to buy more equipment. So we decided to limit the sign-up to only the first 1,000 people who signed up; then we would shut off sign-ups for a while.

But how do you even get 1,000 people to sign up for your service? In our case, get some major publications to write about our beta. (Note: In a future post I’ll explain exactly how to find and reach out to writers. Sign up to receive all of the entrepreneurial posts in this series.)

Public Beta
For our original service (computer backup), we did not have a public beta; but when we launched Backblaze B2, we had a private and then a public beta. The private beta allowed us to work out early kinks, while the public beta brought us a more varied set of use cases. In public beta, there is no cap on the number of users that may try the service.

While this is a first-class problem to have, if your service is flooded and stops working, it’s still a problem. Think through what you will do if that happens. In our early days, when our system could get overwhelmed by volume, we had a static web page hosted with a different registrar that wouldn’t let customers sign up but would tell them when our service would be open again. When we reached a critical volume level we would redirect to it in order to at least provide status for when we could accept more customers.

Collect Feedback
Since one of the goals of betas is to get feedback, we made sure that we had our email addresses clearly presented on the site so users could send us thoughts. We were most interested in broad qualitative feedback on users’ experience, so all emails went to an internal mailing list that would be read by everyone at Backblaze.

For our B2 public and private betas, we also added an optional short survey to the sign-up process. In order to be considered for the private beta you had to fill the survey out, though we found that 80% of users continued to fill out the survey even when it was not required. This survey had both closed-end questions (“how much data do you have”) and open-ended ones (“what do you want to use cloud storage for?”).

BTW, despite us getting a lot of feedback now via our support team, Twitter, and marketing surveys, we are always open to more – you can email me directly at gleb.budman {at} backblaze.com.

Don’t Throw Away Users
Initially our backup service was available only on Windows, but we had an email sign-up list for people who wanted it for their Mac. This provided us with a sense of market demand and a ready list of folks who could be beta users and early adopters when we had a Mac version. Have a service targeted at doctors but lawyers are expressing interest? Capture that.

Product Launch

When
The first question is “when” to launch. Presuming your service is in ‘public beta’, what is the advantage of moving out of beta and into a “version 1.0”, “gold”, or “public availability”? That depends on your service and customer base. Some services fly through public beta. Gmail, on the other hand, was (in)famous for being in beta for 5 years, despite having over 100 million users.

The term beta says to users, “give us some leeway, but feel free to use the service”. That’s fine for many consumer apps and will have near zero impact on them. However, services aimed at businesses and government will often not be adopted with a beta label as the enterprise customers want to know the company feels the service is ‘ready’. While Backblaze started out as a purely consumer service, because it was a data backup service, it was important for customers to trust that the service was ready.

No product is bug-free. But from a product readiness perspective, the nomenclature should also be a reflection of the quality of the product. You can launch a product with one feature that works well out of beta. But a product with fifty features on which half the users will bump into problems should likely stay in beta. The customer feedback, surveys, and your own internal testing should guide you in determining this quality during the beta. Be careful about “we’ve only seen that one time” or “I haven’t been able to reproduce that on my machine”; those issues are likely to scale with customers when you launch.

How
Launching out of beta can be as simple as removing the beta label from the website/product. However, this can be a great time to reach out to press, write a blog post, and send an email announcement to your customers.

Consider thanking your beta testers somehow; can they get some feature turned out for free, an extension of their trial, or premium support? If nothing else, remember to thank them for their feedback. Users that signed up during your beta are likely the ones who will propel your service. They had the need and interest to both be early adopters and deal with bugs. They are likely the key to getting 1,000 true fans.

The Beginning
The title of this post was “Getting your first customers”, because getting to launch may feel like the peak of your journey when you’re pre-launch, but it really is just the beginning. It’s a step along the journey of building your business. If your launch is wildly successful, enjoy it, work to build on the momentum, but don’t lose track of building your business. If your launch is a dud, go out for a coffee with your team, say “well that sucks”, and then get back to building your business. You can learn a tremendous amount from your early customers, and they can become your biggest fans, but the success of your business will depend on what you continue to do the months and years after your launch.

The post From Idea to Launch: Getting Your First Customers appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Building a Competitive Moat: Turning Challenges Into Advantages

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/turning-challenges-into-advantages/

castle on top of a storage pod

In my previous post on how Backblaze got started, I mentioned that “just because we knew the right solution, didn’t mean that it was possible.” I’ll dig into that here. The right solution was to offer unlimited backup for $5 per month. The price of storage at the time, however, would have likely forced us to price our unlimited backup service at 2x – 5x that.

We were faced with a difficult challenge – compromise a fundamental feature of our product by removing the unlimited storage element, increase our price point in order to cover our costs but likely limit our potential customer base, seek funding in order to run at a loss while we built market share with a hope/prayer we could make a profit in the future, or find another way (huge unknown that might not have a solution). Below I’ll dig into the options that were available, the paths we tried, and how this challenge completely transformed our company and ended up being our greatest technological advantage.

Available Options:

Use a Storage Service

Originally we intended to build the backup application, but leave the back-end storage to others; likely Amazon S3. This had many advantages:

  1. We would not have to worry about the storage at all
  2. It would scale up or down as we needed it
  3. We would pay only for what we used

Especially as a small, bootstrapped company with limited resources – these were incredible benefits.

There was just one problem. At S3’s then current pricing ($0.15/GB/month), a customer storing just 33 GB would cost us 100% of the $5 per month we would collect. Additionally, we would need to pay S3 transaction and download charges, along with our engineering/support/marketing and other expenses.. The conclusion, even if the average customer stored just 33 GB, it would cost us at least $10/month for a customer that we were charging just $5/month.

In 2007, when we were getting started, there were a few other storage services available. But all were more expensive. Despite the fantastic benefits of using such a service, it simply didn’t work for us.

Buy Storage Systems

Buying storage systems didn’t have all the benefits of using a storage service – we would have to forecast need, buy in big blocks up front, manage data centers, etc. – but it seemed the second-best option. Companies such as EMC, NetApp, Dell, and others sold hundreds of petabytes of storage systems where they provide the servers, software, and support.

Alas, there were two problems: One temporary, the other permanent (and fatal). The temporary problem was that these systems were hundreds of thousands of dollars just to get started. This was challenging for us from a cash-flow perspective, but it was just a question of coming up with the cash. The permanent problem was that these systems cost ~$1,000/TB of storage. Hard drives were selling for ~$100/TB, so there was a 10x markup for the storage system. That markup eliminated pursuing this path. What if the the average customer had 100 GB to store? It would take us 20 months to pay off the purchase. We weren’t sure how much data the average customer would have, but the scenarios we were running made it seem like a $5/month price point was unsustainable.

Our Choices Where:

Don’t Offer the Right Solution

If it’s impossible to offer unlimited backup for $5/month, there are certainly choices. We could have raised the price to $10/month, not make the backup unlimited, or close-up shop altogether. All doable, none ideal.

Raise Funding

Plenty of companies raise funding before they can be self-sustaining, and it can work out great for everyone. We had raised funding for a previous company and believed we could have done it for Backblaze. And raising funding would have taken care of the cash-flow issue if we chose to buy storage systems.

However, it would have left us with a business with negative unit economics – we would lose money on every customer, and the faster we grew, the more money we would lose. VCs do fund these types of companies often (many of the delivery companies today fall in this realm) with the idea that, at scale, you improve your cost structure and possibly also charge more. But it’s a dangerous game since not only is the business not self-sustaining, it inevitably must be significantly altered in order to survive.

Find a Way to Store Data for Less

If there were some way to store data for less, significantly less, it could all work. We had a tiny glimmer of hope that it would be possible: Since hard drives only cost ~$100/TB, if we could somehow use those drives without adding much overhead, that would be quite affordable.

“we wanted to build a sustainable business from day one and build a culture that believes dollars come from customers.”

Our first decision was to not compromise our product by restricting the amount of storage. Although this would have been a much easier solution, it violated our core mission: Create a simple and inexpensive solution to backup all of your important data.

We had previously also decided not to raise funding to get started because we wanted to build a sustainable business from day one and build a culture that believes dollars come from customers. With those decisions made, we moved onto finding the best solution to fulfill our mission and create a viable company.

Experimentation

All we wanted was to attach hard drives to the Internet. If we could do that inexpensively, our backup application could store the data there and we could offer our unlimited backup service.

A hard drive needs to be connected to a server to be available on the Internet. It certainly wouldn’t be very cost effective to have one server for every hard drive, as the server costs would dominate the equation. Alternatively, trying to attach a lot of drives to a server resulted in needing expensive “enterprise” servers. The goal then became cost-efficiently attaching as many hard drives as possible to one server. According to its spec, USB is supposed to allow for 127 devices to be daisy-chained to a single port. We tried; it didn’t work. We considered Firewire, which could connect 63 devices, but the connectors are aimed at graphic designers and ended up too expensive on a unit-basis. Our next thought was to use small consumer-grade DAS (Direct-attached storage) devices and connect those to a server. We managed to attach 8 DAS devices with 4 drives each for a total of 32 hard drives connected to one server.

DAS units attached to a server
This worked well, but it was operationally challenging as none of these devices were meant to fit in a data center rack. Further complicating matters was that moving one of these setups required cabling 10 power cords, and separately moving 9 boxes. Fine at small scale, but very hard to scale up.

We realized that we didn’t need all the boxes, we just needed backplanes to connect the drives from the DAS boxes to the motherboard from the server. We found a different DAS box that supports port multipliers and took that backplane. How did we decide on that DAS box? Tim, co-founder & Chief Cloud Officer, remembers going to Fry’s and picking the box that looked “about right”.

That all laid the path for our eventual 45 drive design. The next thought was: If we could put all that in one box, it might be the solution we were looking for. The first iteration of this was a plywood box.

the first wooden storage pod

That eventually evolved into a steel server and what we refer to as a Storage Pod.

steel storage pod chassis

Building a Storage Platform

The Storage Pod became our key building block, but was just a tiny component of the ‘storage platform’. We had to write software that would run on each Storage Pod, software that would create redundancy between the Storage Pods, and central software and systems that would coordinate other aspects of the system to accept/load balance/validate/clean-up data. We had to find and train contract manufacturers to build the Storage Pods, find and negotiate data center space and bandwidth, setup processes to buy drives and track their reliability, hire people to maintain the systems, and setup the business processes to do all of this and more at scale.

All of this ended up taking tremendous technical effort, management engagement, and work from all corners of Backblaze. But it has also paid enormous dividends.

The Transformation

We started Backblaze thinking of ourselves as a backup company. In reality, we became a storage company with ‘backup’ as the first service we offered on our storage platform. Our backup service relies on the storage platform as, without the storage platform, we couldn’t offer unlimited backup. To enable the backup service, storage became the foundation of our company and is still what we live and breathe every day.

It didn’t just change how we built the service, it changed the fundamental DNA of the company.

Dividends

Creating our own storage platform was certainly hard. But it enabled us to offer our unlimited backup for a low price and do that while running a sustainable business.

“It didn’t just change how we built the service, it changed the fundamental DNA of the company.”

We felt that we had a service and price point that customers wanted, and we “unlocked” the way to let us build it. Having our storage platform also provides us with a deep connection to our customers and the storage community – we share how we build Storage Pods and how reliable hard drives in our environment have been. That content, in turns, helps brings awareness to Backblaze; the awareness helps establish the company as a tech leader; that reputation helps us recruit to our growing team and earns customers who are evaluating our solutions vs Storage Company X.

And after years of being a storage company with a backup service, and being asked all the time to just offer our storage directly, we launched our Backblaze B2 Cloud Storage service. We offer this raw storage at a price of $0.005/GB/month – that’s less than 1/4th of the price of S3.

If we had built our backup service on one of the existing storage services or storage systems, it would have been easier – but none of this would have been possible. This challenge, which we have spent a decade working to overcome, has also transformed our company and became our greatest technological advantage.

The post Building a Competitive Moat: Turning Challenges Into Advantages appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Turning Steel Into Tin: The First 10 Years of Backblaze

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/backblaze-turns-10/

Today Backblaze celebrates turning 10 years old. Tin is the traditional gift for a ten year wedding anniversary: a sign of strength and flexibility. Getting to this point took not only the steel to make the servers, but tin as well.

How things have changed:

20072017
TeamFive Founders in a Palo Alto apartment55 employees around the country
StorageHard drives strung together60-drive, tool-less Storage Pods
Drives1 TB drives8 TB and 10 TB dries
RedundancyRAID redundancy20-Storage Pod Vault redundancy
Storage45 TB of total stored customer data300,000+ TB
CustomersA few friends as customersHundreds of thousands across 125 countries
Files Saved1 customer’s data restored (mine)20 billion+ files restored
Business LinesConsumer BackupConsumer Backup, Business Backup, and Cloud Storage
Financials$0 revenueMillions in revenue and profitable
MissionMake storing data astonishingly easy and low-costMake storing data astonishingly easy and low-cost

From Our Humble Beginnings In 2007:

To Over 300 Petabytes in 2017:

Someone recently asked me, “Does Backblaze look now the way you imagined it would ten years ago?” The honest answer? I had never imagined what it would like in ten years; when trying to figure out how to even get to market, that timespan wasn’t even on my radar. When we were filming our first video, we were more concerned with finding our first customer than planning our first birthday.

Now, not only has it been a decade, but we’re signing 5-year data center contracts and talking about what the company will look like in ten years and beyond. We often say that we hope this will be the last job for our employees.

Thinking back, a few things I learned:

  • Staying in business is as much about commitment as cash.
  • The existential risks are hard to predict.
  • The hardest times are rarely due to tech or business; they’re personal.
  • The accepted wisdom is often wrong.
  • Less money often leads to better solutions.
  • Culture affects everything.

I’ll expand on all of these in future posts. Over the next few months, I’ll be more active in bringing back our entrepreneurship series of blog posts. Don’t worry, our Hard Drive Stats and all the other stuff aren’t going anywhere!

But today is about the community that makes Backblaze what it is: None of it would have been possible without all of the people who built Backblaze as their own company every day, our friends and boosters, partners, and (of course) our incredible customers. While I did not, and likely could not, imagine a decade ago where Backblaze would be today, I’m thrilled at where we have arrived. Thank you.

And tomorrow, onto the next decade.

The post Turning Steel Into Tin: The First 10 Years of Backblaze appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Backblaze B2 Drops Download Price By 60%

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/b2-drops-download-pricing/

B2 Costs 60% Less

We are thrilled to announce that, effective immediately, we are reducing the price of Backblaze B2 Cloud Storage downloads from $0.05 to $0.02 per GB. What’s more, the first gigabyte of data downloaded each day is still free.

Backblaze has always aimed to make storing data astonishingly easy and affordable. This price reduction applies immediately to all existing and new customers, and there are no tiers or minimums required to get this pricing. It’s automatic, and it starts today.

Why Does This Matter?

It makes cloud storage useful for more people.

B2 is already known for being reliable, easy-to-use, and affordable – our storage pricing is ¼ that of S3. This allows you to save more thorough backups, keep longer archives, store large data sets needed for machine learning and much more. Reducing the price of downloading data lowers the total cost of using cloud storage. This makes cloud storage a viable solution for organizations where it previously didn’t make financial sense.

For example, Vintage Aerial has over 50 years’ worth of aerial photography of rural America. It’s an American treasure. They scanned and digitized the photos and needed a place to cost effectively store the hi-res image files they would send to their customers. Before B2, the other cloud storage options were simply too expensive, leaving Vintage Aerial in the unenviable position of trying to figure out which of their assets they could offer for sale online. But, as Vintage Aerial CEO Fritz Byers says, “because of B2’s pricing, reliability, and service levels, Vintage Aerial is now able to offer and monetize our complete catalog of over 20 million pictures to anyone that’s interested.”

Today’s reduction in download pricing opens another opportunity for Vintage Aerial – downloading high-res photos as previews to its customers. Customers will soon be able to see in detail what they’re getting and zoom in to request specific parts of photos. B2 is empowering Vintage Aerial to provide new functionality that dramatically improves the customer experience and expands the company’s market.

It gives you access to your data when you need it.

Backblaze B2 removes the need to choose between cost and access when it comes to storing your data in the cloud. When you store data in the cloud, you expect to be able to retrieve it at some point. Some services make it expensive to restore data or place time lag impediments to data access to reduce their cost. That reduces the usefulness of your data. If you need to recover all your data quickly from an archive or backup or want to make your data available in real-time, you don’t want to wait, and you don’t want to be shocked at the price tag.

It ensures that your data is yours.

When it’s expensive to get data out, you feel like your cloud storage provider is holding your files hostage. You can’t switch providers or move data back on-site. Part of Backblaze B2 being easy is ensuring that you can do what you want, when you want, with your information. Reducing the price of downloads ensures you can feel comfortable knowing your data is yours.

It’s another reason for third party applications to integrate with B2.

Many organizations already manage their data backups, archives, and workflows using third party applications that have integrated with B2 Cloud Storage. Applications like CloudBerry, Synology CloudSync, Retrospect, Cantemo, axle Video, CatDV and many others have added B2 support in their products; over the next few months, Transmit and QNAP will release their integrations as well.

For applications that have integrated with B2, users not only get the lowest cost storage but the lowest cost download bandwidth as well. For application providers, integrating B2 offers a differentiated service for their users. If you use an application that doesn’t use B2 Cloud Storage, ask the application provider to add B2 and mention the application in the comments below.

It reduces your bill.

Regardless of how you use B2, the download price reduction matters because it lowers your bill. And a lower bill means you can lower your cost and increase your margins, or lower your prices – each of which makes business better.

How does this compare?

Not only is Backblaze B2 storage 1/4th the price of Amazon S3, Google Cloud, or Azure, but our download pricing is now as little as 1/4th their price as well.

Pricing TierBackblaze B2Amazon S3Microsoft AzureGoogle Cloud
First 1 TB$0.02$0.09$0.09$0.12
Next 9 TB$0.02$0.09$0.09$0.11
Next 40 TB$0.02$0.085$0.09$0.08
Next 100 TB$0.02$0.07$0.07$0.08
Next 350 TB+$0.02$0.05$0.05$0.08

Using the chart above, let’s compute a few examples of download costs…

DataBackblaze B2Amazon S3Microsoft AzureGoogle Cloud
1 terabyte$20$90$90$120
10 terabytes$200$900$900$1,200
50 terabytes$1,000$4,300$4,500$4,310
500 terabytes$10,000$28,800$29,000$40,310
Not only is Backblaze B2 pricing dramatically lower cost, it’s also simple. One price for any amount of data downloaded to anywhere. In comparison, to compute the cost of downloading 500 TB of data with S3 you start with the following formula: (($0.09 * 10) + ($0.085 * 40) + ($0.07 * 100) + ($0.05 * 350)) * 1,000. Want to see this comparison for the amount of data you manage? Use our cloud storage calculator.

How did we do this?

Easy, we just lowered the price.

We’ve been reducing the cost of cloud storage for a decade, building and open-sourcing our Storage Pods, developing our Vaults, and more. As a result, we know a fair bit about storing data cost efficiently.

When we announced B2 Cloud Storage, we weren’t totally sure how individuals and companies would use bandwidth, and so we priced it competitively within the market. With a year and a half of B2 usage (and a decade of related experience storing customer data), we’ve determined the patterns are sufficiently stable that we can sustainably reduce our pricing.

To sum up our pricing, downloading data costs $0.02/GB, with the first gigabyte downloaded each day being free. Storage costs are $0.005/GB per month with the first 10 gigabytes being free. We have just one pricing tier so you get the best price we can offer from the start.

Our aim has always been to provide a great service at a fair price. While we’re certainly proud to be the low-cost leader in the space, we’re much happier that we can help customers to be more effective in their businesses.

Enjoy the service, and I’d love to hear in the comments what this price reduction means for you.

The post Backblaze B2 Drops Download Price By 60% appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

How Backblaze Got Started: The Problem, The Solution, and the Stuff In-Between

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/how-backblaze-got-started/

How Backblaze Got Started

Backblaze will be celebrating its ten year anniversary this month. As I was reflecting on our path to get here, I thought some of the issues we encountered along the way are universal to most startups. With that in mind, I’ll write a series of blog posts focused on the entrepreneurial journey. This post is the first and focuses on the birth of Backblaze. I hope you stick around and enjoy the Backblaze story along the way.

What’s Your Problem?

The entrepreneur builds things to solve problems – your own or someone else’s. That problem may be a lack of something that you wish existed or something broken you want to fix. Here’s the problem that kicked off Backblaze and how it got noticed:

Brian Wilson, now co-founder and CTO of Backblaze, had been doing tech support for friends and family, as many of us did. One day he got a panicked call from one of those friends, Lise.

Lise: “You’ve got to help me! My computer crashed!”
Brian: “No problem – we’ll get you a new laptop; where’s your backup?”
Lise: “Look, what I don’t need now is a lecture! What I need is for you to get my data back!”

Brian was religious about backing up data and had been for years. He burned his data onto a CD and a DVD, diversifying the media types he used. During the process, Brian periodically read some files from each of the discs to test his backups. Finally, Brian put one disc in his closet and mailed another to his brother in New Mexico to have it offsite. Brian did this every week!

Brian was obviously a lot more obsessive than most of us.

Lise, however, had the opposite problem. She had no backup. And she wasn’t alone.

Whose Problem Is It?

A serious pain-point for one person may turn out to be a serious pain-point for millions.

At this point, it would have been easy just to say, “Well that sucks” or blame Lise. “User error” and “they just don’t get it” are common refrains in tech. But blaming the user doesn’t solve the problem.

Brian started talking to people and asking, “Who doesn’t back up?” He also talked with me and some of the others that are now Backblaze co-founders, and we asked the same question to others.

It turned out that most people didn’t back up their computers. Lise wasn’t the anomaly; Brian was. And that was a problem.

Over the previous decade, everything had gone digital. Photos, movies, financials, taxes, everything. A single crashed hard drive could cause you to lose everything. And drives would indeed crash. Over time everything would be digital, and society as a whole would permanently lose vast amounts of information. Big problem.

Surveying the Landscape

There’s a well-known adage that “Having no competition may mean you have no market.” The corollary I’d add is that “Having competition doesn’t mean the market is full.”

Weren’t There Backup Solutions?

Yes. Plenty. In fact, we joked that we were thirty years too late to the problem.

“Solutions Exist” does not mean “Problem Solved.” Even though many backup solutions were available, most people did not back up their data.

What Were the Current Solutions?

At first glance, it seems clear we’d be competing with other backup services. But when I asked people “How do you back up your data today?”, here were the answers I heard most frequently:

  • Copy ‘My Documents’ directory to an external drive before going on vacation
  • Copy files to a USB key
  • Send important files to Gmail
  • Pray
  • And “Do I need to back up?” (I’ll talk about this one in another post.)

Sometimes people would mention a particular backup app or service, but this was rare.

What Was Wrong With the Current Solutions?

Existing backup systems had various issues. They would not back up all of the users’ data, for example. They would only back up periodically and thus didn’t have current data. Most solutions were not off-site, so fire, theft or another catastrophe could still wipe out data. Some weren’t automatic, which left more room for neglect and user error.

“Solutions Exist” does not mean “Problem Solved.”

In fairness, some backup products and services had already solved some of these issues. But few people used those products. I talked with a lot of people and asked, “Why don’t you use some backup software/service?”

The most common answer was, “I tried it…and it was too hard and too expensive.” We’d learn a lot more about what “hard” and “expensive” meant along the way.

Finding and Testing Solutions

Focus is critical for execution, but when brainstorming solutions, go broad.

We considered a variety of approaches to help people back up their files.

Peer-to-Peer Backup: This was the original idea. Two people would install our backup software which would send each person’s data to the other’s computer. This idea had a lot going for it: The data would be off-site; It would work with existing hardware; It was mildly viral.

Local Drive Backup: The backup software would send data to a USB hard drive. Manually copying files to an external drive was most people’s idea of backing up. However, no good software existed at the time to make this easy. (Time Machine for the Mac hadn’t launched yet.)

Backup To Online Services: Weirder and more unique, this idea stemmed from noticing that online services provided free storage: Flickr for photos; Google Docs for documents and spreadsheets; YouTube for movies; and so on. We considered writing software that would back up each file type to the service that supported it and back up the rest to Gmail.

Backup To Our Online Storage: We’d create a service that backed up data to the cloud. It may seem obvious now, but backing up to the cloud was just one of a variety of possibilities at the time. Also, initially, we didn’t mean ‘our’ storage. We assumed we would use S3 or some other storage provider.

The goal was to come up with a solution that was easy.

We put each solution we came up with through its paces. The goal was to come up with a solution that was easy: Easy for people to use. Easy to understand.

Peer-to-peer backup? First, we’d have to explain what it is (no small task) and then get buy-in from the user to host a backup on their machine. That meant having enough space on each computer, and both needed to be online at the same time. After our initial excitement with the idea, we came to the conclusion that there were too many opportunities for things to go wrong. Verdict: Not easy.

Backup software? Not off-site, and required the purchase of a hard drive. If the drive broke or wasn’t connected, no backup occurred. A useful solution but again, too many opportunities for things to go wrong. Verdict: Not easy.

Back up to online services? Users needed accounts at each, and none of the services supported all file types, so your data ended up scattered all over the place. Verdict: Not easy.

Back up to our online storage? The backup would be current, kept off-site, and updated automatically. It was easy to for people to use, and easy to understand. Verdict: Easy!

Getting To the Solution

Don’t brainstorm forever. Problems don’t get solved on ideas alone.

We decided to back up to our online storage! It met many of the key goals. We started building.

Attempt #1

We built a backup software installer, a way to pick files and folders to back up, and the underlying engine that copies the files to remote storage. We tried to make it comfortable by minimizing clicks and questions.

Fail #1

This approach seemed easy enough to use, at least for us, but it turned out not to be for our target users.

We thought about the original answer we heard: “I tried it…and it was too hard and too expensive.”

“Too hard” is not enough information. What was too hard before? Were the icons too small? The text too long? A critical feature missing? Were there too many features to wade through? Or something else altogether?

Dig deeper into users’ actual needs

We reached out to a lot of friends, family, and co-workers and held some low-key pizza and beer focus groups. Those folks walked us through their backup experience. While there were a lot of difficult areas, the most complicated part was setting up what would be backed up.

“I had to get all the files and folders on my computer organized; then I could set up the backup.”

That’s like cleaning the garage. Sounds like a good idea, but life conspires to get in the way, and it doesn’t happen.

We had to solve that or users would never think of our service as ‘easy.’

Takeaway: Dig deeper into users’ actual needs.

Attempt #2

Trying to remove the need to “clean the garage,” we asked folks what they wanted to be backed up. They told us they wanted their photos, movies, music, documents, and everything important.

We listened and tried making it easier. We focused our second attempt at a backup solution by pre-selecting everything ‘important.’ We selected the documents folder and then went one step further by finding all the photo, movies, music, and other common file types on the computer. Now users didn’t have to select files and folders – we would do it for them!

Fail #2

More pizza and beer user testing had people ask, “But how do I know that my photos are being backed up?”

We told them, “we’re searching your whole computer for photos.”

“But my photos are in this weird format: .jpg, are those included? .gif? .psd?”

We learned that the backup process felt nebulous to users since they wouldn’t know what exactly would be selected. Users would always feel uncomfortable – and uncomfortable isn’t ‘easy.’

Takeaway: No, really, keep digging deeper into users’ actual needs. Identify their real problem, not the solution they propose.

Attempt #3

We took a step back and asked, “What do we know?”

We want all of our “important” files backed up, but it can be hard for us to identify what files those are. Having us guess makes us uncomfortable. So, forget the tech. What experience would be the right one?

Our answer was that the computer would just magically be backed up to the cloud.

Then one of our co-founders Tim wondered, “what if we didn’t ask any questions and just backed up everything?”

At first, we all looked at him askew. Backup everything? That was a lot of data. How would that be possible? But we came back to, “Is this the right answer? Yes. So let’s see if we can make it work.”

So we flipped the entire backup approach on its head.

We didn’t ask users, “What do you want to have backed up.” We asked, “What do you NOT want to be backed up?” If you didn’t know, we’d back up all your data. It took away the scary “pick your files” question and made people comfortable that all their necessary data was being backed up.

We ran that experience by users, and their surprised response was, “Really, that’s it?” Hallelujah.

Success.

Takeaway: Keep digging deeper. Don’t let the tech get in the way of understanding the real problem.

Pricing

Pricing isn’t a side-note – it’s part of the product. Understand how customers will perceive your pricing.

We had developed a solution that was easy to use and easy to understand. But could we make it easy to afford? How much do we charge?

We would be storing a lot of data for each customer. The more data they needed to store, the more it would cost us. We planned to put the data on S3, which charged $0.15/GB/month. So it would seem logical to follow that same pricing model.

People thought of the value of the service rather than an amount of storage.

People had no idea how much data they had on their hard drive and certainly not how much of it needed to be backed up. Worse, they could be off by 1000x if they weren’t sure about the difference between megabytes and gigabytes, as some were.

We had to solve that too, or users would never think of our service as ‘easy.’

I asked everyone I could find: “If we were to provide you a service that automatically would backup all of the data on your computer over the internet, what would that be worth to you?”

What I heard back was a bell-curve:

  • A small number of people said, “$0. It should be free. Everything on the net is free!”
  • A small number of people said, “$50 – $100/month. That’s incredibly valuable!”
  • But by far the majority said, “Hmm. If it were $5/month, that’d be a no-brainer.”

A few interesting takeaways:

  • Everyone assumed it would be a monthly charge even though I didn’t ask, “What would you pay per month.”
  • No one said, “I’d pay $x/GB/month,” so people thought of the value of the service rather than an amount of storage.
  • There may have been opportunities to offer a free service and attempt to monetize it in other ways or to charge $50 – $100/month/user, but these were the small markets.
  • At $5/month, there was a significant slice of the population that was excited to use it.

Conclusion On the Solution

Over and over again we heard, “I tried backing up, but it was too hard and too expensive.”

After really understanding what was complicated, we finally got our real solution: An unlimited online backup service that would back up all your data automatically and charge just $5/month.

Easy to use, easy to understand, and easy to afford. Easy in the ways that mattered to the people using the service.

Often looking backward things seem obvious. But we learned a lot along the way:

  • Having competition doesn’t mean the market is full. Just because solutions exist doesn’t mean the problem is solved.
  • Don’t brainstorm forever. Problems don’t get solved on ideas alone. Brainstorm options, but don’t get stuck in the brainstorming phase.
  • Dig deeper into users’ actual needs. Then keep digging. Don’t let your knowledge of tech get in the way of your understanding the user. And be willing to shift course as your learn more.
  • Pricing isn’t a side-note. It’s part of the product. Understand how customers will perceive your pricing.

Just because we knew the right solution didn’t mean that it was possible. I’ll talk about that, along with how to launch, getting early traction, and more in future posts. What other questions do you have? Leave them in the comments.

The post How Backblaze Got Started: The Problem, The Solution, and the Stuff In-Between appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

VP of Marketing Ahin Thomas

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/vp-marketing-ahin-thomas/

ahin
A couple months ago we opened a role for a VP of Marketing, which I said at the time was “both exhilarating and frightening.” Frightening because I “played the role since the inception of the company, it would be our first non-founder executive hire, I really want to make sure that we hire that magical person who would be perfect for this role – and I know how hard that can be.”

We posted the position on our blog, promoted it on various sites, and canvassed our friends and colleagues for suggestions. Over 50 great people applied, I interviewed 17, and brought in 8 to meet the broader team. Today I’ve moved to the ‘exhilarated’ state as we have made and offer and hired Ahin Thomas.

He brings a great blend of consumer and business marketing, is deep on digital marketing, started and ran a company, and shares our values and culture.

Get to know him a bit more below,

What is your Backblaze Title?
Vice President, Marketing

Where are you originally from?
The Bay Area! Grew up in Saratoga then Woodside, currently living in San Francisco.
  
What attracted you to Backblaze?
Reading through the blog and getting the sense of the team here. There’s no shortage of places that talk about culture, but finding one that lives it is special.
 
What do you expect to learn while being at Backblaze?
Tactically, I’ve already learned more about data storage infrastructure then I would have ever thought! More broadly though, it’s working as part of a high performing team on challenges that not that many people want to touch… And doing it profitably… While swimming in a pond with some of the biggest fish imaginable. We’re outnumbered, outgunned, and perhaps out of our minds.

Where else have you worked?
Couple bartending gigs, songwriter… oh! And hand model (true story). Most recent stints were at Sears Holdings (Dir of eComm), Vintners’ Alliance (Co-Founder / CEO), and Symphony Commerce (Head of Marketing).
 
Where did you go to school?
Ormondale Elementary, Corte Madera Middle School, Sacred Heart Prep, Georgetown University, The Wharton School of Business.

What’s your dream job?
Shooting guard for the Golden State Warriors.

Favorite place you’ve traveled?
Mendoza, Argentina. Was a couple more glasses of Malbec away from not coming back home.

Favorite hobby?
Cooking. My wife would say “acquiring cooking accessories”. I would say my sous viding skills are beyond reproach.

Of what achievement are you most proud?
Fairly consistent happiness.

There was also the time when I put my pants on both legs at a time (a sorta jumping motion). Took about 15 weeks… but I was finally around when someone said “well, we all put our pants on one leg at a time.” No, no we do not.

Star Trek or Star Wars?
Star Wars… although I have been questioning it.

Coke or Pepsi?
Coke.

Favorite food?
Super Carne Asada Burrito, no rice.

Why do you like certain things?
I find meaning in the process – engaging in a story, enjoying a song, or sharing a meal.
 
Anything else you’d like you’d like to tell us?
I love being wrong (because if you know you’re wrong then there’s a high likelihood you’ve figured out what’s right). I’m a terrible but enthusiastic golfer, passable squash player, and watch more professional wrestling than should probably be shared in this (or any other) forum.

Welcome to the team Ahin!

The post VP of Marketing Ahin Thomas appeared first on Backblaze Blog | Cloud Storage & Cloud Backup.

Hiring a VP of Marketing

Post Syndicated from Gleb Budman original https://www.backblaze.com/blog/hiring-vp-marketing/

Backblaze Marketing is Hiring

Backblaze is looking to hire a VP of Marketing. I find that both exhilarating and frightening. Why frightening? Because I’ve played the role since the inception of the company, it would be our first non-founder executive hire, I really want to make sure that we hire that magical person who would be perfect for this role – and I know how hard that can be.

Are you that person? Or know someone who might be? Read on…

In 2007 after a friend’s computer crash caused her some suffering, we realized that – with every photo, video, song, and document going digital – everyone would eventually lose all of their information. Five of us quit our jobs to start a company with the goal of making it easy for people to back up their data.

Like many startups, for a while we worked out of a co-founder’s one-bedroom apartment. Unlike most startups, we made an explicit agreement not to raise funding during the first year. We would then touch base every six months and decide whether to raise funding or not. We wanted to focus on building the company and the product, not on pitching and slide decks. And critically, we wanted to build a culture that understood money comes from customers, not the magical VC giving tree. Over the course of 5 years we built a profitable, multi-million dollar revenue business – and only then did we raise a VC round.

Why tell you this? Because it helps to understand our approach to building the company, and as a result, to marketing. I believe in the value of marketing and the value of brand, but also, that a great brand is built through the overall experience the company provides and not a billboard or super bowl commercial. Investing in marketing (for our business) is critical, but outspending others is not the goal. I’m not afraid of spending money on marketing – but want to tie it to ROI as a result of scaling successful iterative experiments.

When we sat in that one-bedroom apartment we were building a service we thought customers would love – but with no customers, no web traffic, a brand no one had ever heard of and zero dollars to spend on marketing…it was not clear how we would let any of those potential customers know.

Today, our world looks different and you’ll have some fantastic assets to work with:

  • A brand millions recognize for openness, ease-of-use, and affordability.
  • A computer backup service that stores over 200 petabytes of data (about 1/4th as much Facebook), has recovered over 10 billion files for hundreds of thousands of paying customers – most of whom self-identify as being the people who find and recommend technology products to their friends.
  • Our new B2 service that provides the lowest cost cloud storage on the planet – at 1/4th the price Amazon, Google or Microsoft offer. While new, it already has over 20,000 IT and developers signed up and an ecosystem building up around it.
  • A blog that has been read by millions, a site that ranks well organically, a partner program with over 10,000 affiliates and resellers, a working refer-a-friend program and some ROI-positive paid advertising channels.
  • A growing, profitable and cash-flow positive company.
  • And last, but most definitely not least: a great marketing team and a budget.

You might be saying, “sounds like you’ve got this under control – why do you need me?” Don’t be misled. We need you. Here’s why:

  • We have a great team of creative, smart, self-starters, but how do we make sure everyone is rowing in the same direction and at the same time?
  • We have customers that love us and tell us “I tell everyone to use you!” If each customer referred just one person per year, we’d be growing over 100%. What can we do to make this happen?
  • We have a very popular blog, but how many of the readers have ever tried our service?
  • We do activities and the business grows – but which ones are the real drivers and how do we crank those up rather than doing more of everything?
  • We have our new B2 service (which is at the startup phase where we are learning who the customers are, what do they most care about, how do we talk with them, etc.)…and our computer backup service which currently accounts for the majority of our revenue. How do we nurture one while growing the other?

I am looking for someone who will come in, ask these questions (and others we haven’t even thought to ask), help the team get answers and help us share what we and many of our customers believe to be invaluable services with more people and companies.

So that’s a bit about us. What are we looking for in you?

I don’t really care whether you have 3 PhD’s or never graduated college. But there are things that you’ll need in this role to succeed.

Digital marketing and direct response: You need to understand digital marketing at a granular level. We have done some print/radio/TV/billboard, but the majority of our marketing is online. Understanding SEO, SEM, affiliates, remarketing, email, conversion tracking, A/B tests and all of the respective analytics is key. We also work hard to create good content. Understanding the role of what is now called content marketing is also crucial. Since our approach is ROI-driven, a direct response background is helpful.

Leadership: We have an experienced team who’ve brought us to where we are today. You need to have the people and management skills to get them excited about working with you.

Data driven and creative: The data has to show something makes sense before we scale it up. However, without creativity, it’s easy to say “the data shows it’s impossible” or to find a local maximum. Whether it’s deciding to build our own storage, blogging about our pods and drive reliability, farming hard drives or sending carrier pigeons to deliver mail – we’ve seen a bit of creativity get us places a few extra dollars couldn’t.

Jive with our culture: Strong leaders affect culture and the person we hire for this role may well shape, not only fit into, ours. But to shape the culture you have to be accepted by the organism, which means a certain set of shared values. We default to openness with our team, our customers and everyone if possible. We love initiative – without arrogance or dictatorship. We work to create a place people enjoy showing up to work. That doesn’t mean ping-pong tables and foosball (though we do try to have perks & fun), but it means people are friendly, non-political, working to build a good service and a good place to work.

Do the work: Ideas and strategy are critical, but good execution makes them happen. I’m looking for someone who can help the team execute both from the perspective of being capable of guiding and organizing, but also someone who is hands-on themselves.

Think you want to join us on this adventure?

Send an email to [email protected] with the subject “vp of marketing”. (Principals only.) Include a resume and answer these two questions:

  1. How would you approach evaluating the current marketing and what is your process for developing a growth strategy?
  2. What are the goals you would set for yourself in the 3 month and 1-year timeframe?

Thank you for taking the time to read this and I hope that this sounds like the opportunity for which you’ve been waiting.

The post Hiring a VP of Marketing appeared first on Backblaze Blog | The Life of a Cloud Backup Company.