EMC buys portfolio company Greenplum – more behind the story

Congratulations to Greenplum and Scott Yara, Bill Cook, and Luke Lonergan in particular! It has been quite a roller coaster ride over the last 10 years and there were a number of times we stared at the abyss only to come back stronger.  This is a story of great people and incredible perseverance.  The great news is that we leveraged two strong trends early on - the era of big data and the need for cheaper and better solutions and the fact that hardware is a commodity and the value is in the software.  We also leveraged the open source database platform PostgreSQL as the initial foundation for our technology. After all these years, I am glad to see that EMC and others have caught on to both of these facts.

Little do people know that when Dawntreader first funded Dali Media along with Impact Venture Partners and Primedia Ventures that the company was called Dali Media and then Metapa, standing for media to all places.  This was the year 2000 and the idea was that Metapa would allow any company to send any media asset over any content delivery network and our service would automatically transform the asset for viewing anywhere.  We did have some large initial customers but quickly realized that we were far from capital efficient in a market crash and that we would have to refocus and restart.

Enter Phase II where we made a number of changes and ended up using our software for some data anaytic projects.  Frankly we did this to keep ourselves around long enough to figure out what to do next.  Luckily we had a number of large paying clients that allowed us to sustain ourselves with a little extra cash from the founders and my fund.  Enter Didera (backed by Hudson Ventures) which had a database clustering solution which would allow us to take our data analytics solutions on to commodity clusters.  We bought that company in 2003 and invested some more capital.

We launched an initial prototype, landed a few customers, and brought in Mission Ventures as a new lead investor for the restart of the company.  A few months after closing that round, we changed the name to Greenplum.  This is also when we had to stare at the abyss for the third time.  Although we had a couple of great customers, we discovered that our software would not scale to the desired level.  I vividly remember the day that Scott Yara and Luke Lonergan came in to the room to tell us that we had serious problems and that we would have to start development over and scrap the old architecture for a new one.  Our initial reaction was disbelief and then anger as we saw our venture money and the team's efforts go down the drain.  However, what we also saw was a founder and team full of integrity so Mission and Dawntreader along with the founders decided to pump some more money into the company.  It was a painful process as we had to let go of the sales team that had built initial momentum and we had to hunker down and restart.  However I see that moment as the critical turning point for the company as well.

9 months later we had rebuilt the architecture, relaunched, and landed a couple more great customers.  Enter Sierra Ventures and our first big round of capital which also allowed us to bring Bill Cook as CEO.  The one moment that stands out in my mind was when we were interviewing Bill for the CEO position.  Since he was based on the west coast, he had already met with the other investors.  We started with a phone call and within 15 minutes, Bill decided to get on a redeye and meet me for breakfast to continue our interview.  What I saw in Bill and the rest of the team was how to get deals closed and the desire to do what it takes to make things happen.  Needless to say Bill brought that same culture to the company which took us to where we are today.  Eventually Meritech came in and led a new round and then we were off to the races. 

However, the moral of this story is that sometimes your startup won't grow in a straight line and many times you may take one step forward, two steps back, and then 5 steps forward again.  Secondly, from personal experience, if you have the right team who is passionate and understands how to be flexible in the face of difficult market conditions, you can still build a great company.  When we sold GoToMyPC to Citrix, we also restarted the company from the initial business model that we had and did a complete 180 degree change.  I am not advocating that you try to do this but only proving the point that entrepreneurs will probably fail on their initial model and may have to make changes to their business.  Success can be attained in a big way under that scenario so don't quit.  The guys at Dali Media, Metapa, and Greenplum surely did not and created a phenomenal exit for all involved.  Best of luck at EMC building a killer business in this new era of Big Data!

P.S. There is much more to this story and many more lessons to be learned - I will do my best to share some other tidbits in the future such as how companies are bought and not sold, how our partnering strategy helped us grow, how we dealt with competition, etc...

 

 

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This post was written by who has written 358 posts on BeyondVC.

8 Responses to “EMC buys portfolio company Greenplum – more behind the story”

  1. Ben Kuo Jul 7, 2010 at 12:40 pm #

    Nice to hear the background story on this one, this sounds like an epic journey… (We started way back in 2003 tracking Greenplum, when it was Metapa… It’s been a while…)

    link to socaltech.com

  2. Luke Lonergan Jul 7, 2010 at 12:52 pm #

    Nice post Ed – it’s great to work with investors that “get it” :-)

    - Luke

  3. Ed Sim Jul 7, 2010 at 1:16 pm #

    Luke-what a pleasure working with you. Lots of great stories including the logo at Mach 5 and lunch at Chevys. Enjoy!

  4. ANTs Software Jul 7, 2010 at 2:51 pm #

    This is definitely a great story. We have a similar one. Congratulations Greenplum team !!!

  5. Steve Millard Jul 8, 2010 at 2:03 pm #

    Ed-Having been the head of the talented sales team in 2005 that had nothing to sell (literally) all I can say for the Greenplum team is WOW, what a comeback. Great job to Scott and the team for never, ever giving up (well, except for that Sept. day in 2005….). Myself and my team all went on to big, great things since that inflection point and it is so cool that Greenplum did as well. A great story and one that I will never forget. Congrats to you as well Ed, you personally had as much to do with their success as any investor. Nice job all the way around.

  6. Ed Sim Jul 8, 2010 at 10:55 pm #

    Steve-you guys did a great job of selling what wasn’t ready. i wish we didn’t hire you guys so early but lesson learned for us all! anyway glad to hear that you and the team are doing so well

  7. Randy Domolky Jul 20, 2010 at 9:50 am #

    Good job Ed and thanks to all the DT folks for keeping up the fight. Looks like your persistence will be rewarded!

  8. Muskie McKay Aug 30, 2010 at 10:04 pm #

    A good story on the long winding road to a successful exit.

    Congrats!

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