Founders on Fire: Jeff Denworth, CMO and Co-Founder, VAST Data

Today we have the chance to catch up with our winner of the 2020 Storage Trailblazers category. Jeff Denworth, CMO and Co-Founder at VAST Data, talks to Chief Trailblazer Rose Ross about the secret to the firm’s impressive success, including landing a multi-million-dollar deal far earlier than might be traditionally expected for an enterprise startup.

He also describes how the company was in the fortunate position to raise a round of funding that didn’t need to be dipped into, despite COVID. Plus he gives advice on the fundamentals that all startups should follow and how winning an award can bring a sense of pride for a startup. Listen to the full podcast here:

You can also listen to the podcast on YouTube or Anchor FM.

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Interview transcript

RR: Hello everybody and welcome to the Founders on Fire podcast, where we meet with the founders of our Tech Trailblazing winners from the last decade, and I’m delighted to be joined here by Jeff Denworth, who is the Chief Marketing Officer and co-founder of VAST Data, and who were the winners last year in the Storage Trailblazers category. Welcome Jeff, thank you for joining us today.

JD: Thanks Rose, happy to be here. The name VAST is actually an amalgam of fast and big, but FIG or… I don’t know how you pronounce the opposite, but it didn’t work for a naming purpose, so we just said let’s just go VAST.

RR: FIG Storage just wouldn’t cut it really, would it?

JD: Right! FIG Systems – no good!

RR: Apologies now to anybody who has named their start up FIG Systems because VAST Data almost got there first, but luckily you got that one. Anyway Jeff, thank you for joining us, I know you’ve just landed in Austin, Texas, which is very exciting. What are you doing there?

JD: We have a pretty big team in Texas and a good number of them have yet to meet anybody in the company, so I’m trying to make it a goal to meet those people that have come in, and because of COVID haven’t been able to travel just through that. Where we can make the personal touch we try to.

RR: Fantastic, that sounds very good. I know there are a lot of people who are looking forward to meeting colleagues. A lot of people, as you say, have started their journey with a new company, and I think VAST has been growing quite considerably over the last 12 months as we’ve been dealing with the pandemic, so I should imagine there’s quite a few people who are now old hands in startup terms perhaps, but still very much new faces.

JD: This is true, you start to get familiar with people over Zoom, then you meet them in person, and you realise that they either are exactly or almost to the opposite of what you thought they were. Yeah, so we’ve hired probably about a hundred people, I would say, over the last 12 months or so, so it is kind of the new normal. We’ve taken investment from investors that we haven’t even met face-to-face, so it’s crazy!

RR: Yes, Next 47 led your last round, which was April 2020, so obviously just as everything was becoming very hard to meet people face-to-face… Which team were you primarily interfacing with, for Next 47?

JD: Well we work with the principal which is Lak Ananth, he’s our board member, and they’ve been an amazing partner. One of the hallmarks of their investment thesis is they aren’t just providing money; they’re also providing assistance in the form of business development. So, as the investment arm of Siemens they get to do some pretty interesting things that a classic investor doesn’t get to do. And they’ve been great to work with.

RR: Ah! That’s the German connection, because I was thinking why do I think Next 47 has got a German… I was thinking isn’t Berlin their headquarters then?

JD: I think it’s in Silicon Valley.

RR: Well we’re all global Zoomers now, so it doesn’t really matter where you are.

JD: This is true, well unless you’re stuck in the airport!

RR: Sorry, we won’t hold you up too long, but it’s great to catch up with you. So, from that perspective Next 47 actually area an investor in Cohesity who were winners in the Storage Trailblazers a number of years ago, so they’re obviously…

JD: There’s a pattern.

RR: There is a pattern there, so that’s good. And you guys are looking at a $1.2 billion valuation at the moment. Or you were when you received your funding. Is that old news?

JD: Well it depends on who you’re talking to, but that was on the heels of our 2019 business performance.

RR: And you’ve done incredibly well. I was looking and I’ve got some stats; you’ve been doing rather well over the last two years.

JD: Rose, it’s been awesome. We all kind of took a pause when COVID hit, and we didn’t know which way the world would be spinning throughout the year, and it turns out right product, right place, right time. The team really over-delivered at a time of great uncertainty, so it’s just been awesome to watch the whole VAST team kind of get together and overpower even the very aggressive expectations that we set at the beginning of 2020, and to exceed those it’s just been amazing.

RR: Yes, I’m sure the investors and everybody is really happy about that, because everybody must have been taking a very sharp intake of breath as they were seeing what could be the worst-case scenario, obviously there’s been a worst-case scenario which is on a personal and health perspective, but from a business perspective it’s good to see that you are doing more than just weathering the storm, you’re actually doing incredibly well. So 150 million in the last two years, I believe.

JD: Well, we actually exited the last quarter at $150M run rate which kind of capped off the year, where we grew by 350 percent as compared to the previous year. So, the company is just on a rocket ship, and one of the interesting things that the storage report community clued into is, it’s really easy for an organisation to talk about amazing growth if they don’t start from a very large base. But we’ve kind of managed to strike this really interesting balance between just spectacular revenue growth, but also a very significant business. We’ve sold nearly $100M of product in our first two years, and candidly that’s never been done in this industry before by any company, even some of the leading high-flyer multi-billion dollar public companies right now. So, we’re setting a new bar and we’re doing it at a very interesting time.

RR: Well interesting you mentioned reporters, because a very good friend of mine tipped me off to you guys, we actually did pursue you to hopefully get you to participate, I’m talking about the wonderfully Mr Deep Storage, Mr Howard Marks who is a good friend of mine from the SNW good-old-days when we used to meet up in Orlando.

JD: Howard’s part of our team. We have these pictures of him, he’s dressed as a Wizard and there are just conversations that you can find yourself in with Howard that you realise the depths of knowledge is just off the charts. You don’t even try to keep base with him, you just try to catch the nuggets that he’s leaving. So he’s been with us for – I think he just celebrated his 2-year anniversary the other day.

RR: Absolutely. In fact, you guys have just had your 2nd birthday anyway, February 2019 when you launched.

JD: I think we call it our launcherversary, yeah, we just celebrated our second. That was an interesting one, when you start a company there’s a lot of people that tell you exactly how it should be done and remember in the earliest days we decided to start selling before we came out of stealth mode, which was a little unorthodox, and by the time we had gotten to the launch date we’d sold more than any storage company had in their first year of operation, kind of pre-exit from stealth mode. So, we’ve got some fun stories to tell there, but the conclusion was you don’t have to rush things…

RR: You’re just showing off now!

JD: Well, maybe but I’m also trying to give some guidance which is, you don’t necessarily need to toe the line that everybody else does, if the dynamics are different you can carve your own path. We weren’t rushed. I think we did things relatively well and part of that comes from just challenging convention about how things have been done before.

RR: Well we’re called Trailblazers for a reason, so I’m very glad that you’re living up to your required moniker from us with regards to that. I’ve scooted around because I do very kindly provide you with questions, and then totally ignore them when I actually have you on the phone. Isn’t that kind of me! I thought you’d be easing yourself into this very easy one, just somebody talking about some awards, ‘You know the Tech Trailblazers that we’ve won,’ and they think, ‘Oh no, they’re asking me all these difficult questions’. Well, not difficult because you know the answers, so it’s never difficult then.

So, let’s rein back a little bit because we kind of started with the very break-conversation, I just want to make sure I’m ticking all the boxes of what people expect from the podcast. So, tell us a bit about you and the journey. I assume because you’ve come from Ctera, who were I noted finalists in 2012 in our first edition, you joined them a couple of years later, but you were with DDN prior to that. So, am I right in thinking that you knew your co-founder prior to founding VAST?

JD: Well, I’m kind of a consummate masochist!

RR: I’m sure they won’t take that personally!

JD: Well, my current role included, startups are just so much work. But I really enjoy building businesses and my specialty is storage. So yeah, I’ve been in storage for almost 20 years, actually if you predate DDN, which is a pretty popular company, there’s a company I was at previous to that that gave birth to the Lustre File System which is now a fairly popular file system in scalable computing. So yeah, in total I’ve been probably about 20 years in the storage space.

RR: And pretty much a big part of that in the startup land as well.

JD: Yes, I think it’s a matter of personal preference, but I can’t really envision myself in some sort of big 100,000-person company, there’s a level of agility and autonomy and the ability to break things that I enjoy in the companies that I work with, that I probably naturally couldn’t give up. So yeah, I’m a startup guy.

RR: There’s absolutely nothing wrong with that, we love startup guys. So, tell us a little bit about… we’ve touched upon some of the amazing success. Obviously, as you say, you’ve only come out of stealth just over two years ago, but you already hit the ground running prior to that. So obviously you had product, you were selling product. So you’ve been trailblazing, really just shaking the foundations of how you’re supposed to start an enterprise tech startup, because obviously that seems to be a bit of a pattern, that you come out of stealth then you start getting your first customers, and your investment, and de-de-de… and that’s how you do it.

JD: So, the company basically started with this idea that flash could be an appropriate alternative, and obviously a very compelling alternative to hard drive-based infrastructure in the market. And as we started to unravel what we had, we realised that it also resulted in being able to rethink the ways in which customers deployed storage altogether. So, we kind of chose to launch, which still is an on-premises storage appliance at a time where customers said everybody’s going to cloud. And as opposed to just picking off one part of the storage market, our thinking was we basically had to go in and say we wanted to steamroll the whole thing. So that’s resulted in a number of really challenging, both architectural objectives as well as customer objectives, the challenges that we raise for customers in terms of them rethinking how they do things, that has resulted in some pretty crazy outcomes.

RR: So obviously you’ve had your last round of investment, you’re very well funded, you’re growing very aggressively, and the sales are coming in. You’ve secured something, a major US Federal agency of $10M investment around consolidating data analytics infrastructure. I’ve got a feeling they might be in Virginia and might have a few letters in their name! That’s me just guessing.

But yes, you’re doing very well, you’ve got the backing of Goldman Sachs, Springfield Partners, Mellanox, Dell Technology Capital, who’s missing? I’d better say them all now, 83 North, Commonfund Capital, and Norwest Venture Partners, and obviously led the last round Next 47. Where next? What can you tell us about what’s happening next?

JD: The funny thing about the investment is that we haven’t even dipped into that round. One of the things that we really challenge ourselves to do is to build a company that is not only high growth but also really capital efficient. So, if you ever get the chance to encounter our CEO Renen, you’ll find that he’s a pretty frugal guy.

RR: I shall hunt him down and insist he buys me a latte.

JD: Yeah, you might be going Dutch on that one!

RR: Half a latte then!

JD: Yeah, that might work. So, we kind of realised that if you sold big systems and you’ve really focussed in on what you did well, then you didn’t necessarily need to build the same type of company as has been built in the past. So, a lot of the really successful storage players over the last couple of years, they took in anywhere between half a billion to a billion dollars of spent money before they got to cash-flow positivity. We’ve already achieved that as of the end of last year. We kind of stack our headcount up against some of our peers at equivalent revenue levels, and our team is about half the size. So we have a smaller collection of really dedicated professionals that allow us to be independent from a capital perspective.

RR: Oh this is music to my ears; I absolutely love this stuff. In effect you didn’t actually need to take that round of funding in that case. I’m not saying that you shouldn’t have done, but.

JD: The timing was interesting. On the heels of the previous year’s performance we got good terms, but we actually closed the round pretty much right at the beginning of COVID. So, as I mentioned, we hadn’t met a lot of our investors, but it was kind of fortuitous because we didn’t know how deeply we might have to dig into the rainy-day fund. It turns out we didn’t have to dig into it at all, fortunately, but it came at the right time where nobody knew how the year was going to end up, in March, so it worked out for us.

RR: Well exactly, and we don’t know what’s next, do we? In September you launched LightSpeed which I have to ask, are you going to get investment from Lightspeed VC firm, because that feels like that should happen now.

JD: Well, it’s the new strategy, you just pick the name of the venture capitalist you want, then you name a product after them!

RR: I think this could be the way forward, I think you’ve got another marketing sort of like, everybody says marketing doesn’t necessarily impact your funding, so, here it is, we’ve got it now! Yeah, you’ve got all these fantastic things happening, what’s going to be next, can you give us any little tantalisers in what to be looking forward to in the next year; apart from obviously hopefully doing very, very well in the Tech Trailblazers again this year.

JD: Fingers crossed.

RR: You’ve set the bar high as you said, right?

JD: I think over the next couple of weeks we’ll start to make announcements around a refinement of the storage business model, or the storage consumption model. And here we see an opportunity to not necessarily take customers down this path where everything is cloud and consumption all the time, but at the same time bring them a lot of the benefits of cloud consumption. When we think about this programme that we’re about to unveil, there’s kind of customer personas, and you have the customers today that are buying from Amazon, and then you have the customers that want to be the next Amazon. I think our programme is really tailored for that latter community. We’re telling people you don’t have to necessarily buy from Jeff Bezos in this case, you can become the next Jeff Bezos. And what we’re doing is challenging how people build infrastructure and deploy their data storage. So, we’re excited about that!

RR: Well, I don’t think Jeff is necessarily going to hold your enthusiasm for that.

JD: Well he’s retired now, so somebody needs to take the crown.

RR: I think he’s maybe still counting his beans from afar, what can I say? Well, good luck with that! It sounds exciting in the same way as Amazon obviously smashed through some perceptions, absolutely, let’s see what VAST can come up with, and allow people to do stuff like this for themselves. So that’s exciting, have you got a date for when you’ll be announcing that?

JD: We do, it’s April 6th, right around the corner, the polish is being put on the website now for this one. And then following that we’ve been fortunate to have doubled the engineering team over the last 12 months, we practically need to double it again this year. But now that the product – the foundation is set and stable we just have a litany of feature releases that will come out throughout the year. At the end of the year we’ll have the new hardware platform that we get to unveil, so lots of stuff.

RR: We shall be watching this space with great interest with regards to that.

Any tips? You’ve talked about what you guys have done, what’s been the secret? I mean you obviously can’t totally reveal the secret sauce, apart from the fact that your co-founder and CEO won’t buy me coffee, I don’t think that’s a secret to your success! I don’t drink that much coffee – I do drink a lot but not that much. What tips would you share with people about this, and what are your favourite moments as well? Maybe we’ll start with your favourite moment of your journey so far.

JD: My favourite moment.

RR: Your key moments because I always think there should be favourite ones, right?

JD: There’s a few. It’s just such a fun team to work with, where every day there’s little cute stories that pop up. But one of my favourite moments was, before we had customers, before we had any salespeople, I would hold a sales kick-off for the engineering team, the engineers don’t want to talk about sales at all. But really what the objective was, my job was to be the pathfinder and go and rustle up the early customers. In the absence of having anybody else to talk to I used to just fly out to meet them, we’d sit down for half a day and talk about how the next couple of years could play out, if these early customers came on board. What that did in the earliest days was it really instilled a deep sense of customer centricity into the company, but at the same time half the people in the room were looking at me like I had three heads, just because I was talking in seven different directions about all these crazy things that our customers wanted to do, and they loved it.

So, that I think set the company off on a really good footing, I think we did two sales kick-offs without any salespeople before they actually started coming in, and we just had a great moment with them the other day. That was cool, and then the first time we got our first big order, this is an order of over $2M, I remember before the order even booked, we had a board meeting, a board member looks and he goes, ‘What is this?’ I said, yeah it’s a $3-4M order,’ he’s like, ‘This is impossible!’ and I said, ‘Well, you’re supposed to be on our side, you’re the cheerleader!’ He said, ‘I’m also supposed to be practical, and this has never been accomplished.’ That gave the team a challenge to go and not just prove them wrong, but to rather prove history wrong, and when we closed it, it was a very special moment.

So, yeah, those are the types of stories that I enjoy.

RR: Yes, exactly that kind of thing.

So to other startups, maybe they’re still in stealth or maybe just coming out of stealth, or they may be even a couple of years down the path; what would be your bits of advice apart from obviously enter awards like the Tech Trailblazers, which would be your number one tip; but other than that what would you advise them to do?

JD: On that topic Rose, it was awesome to win the award, but I think what I liked even better is when we started seeing some other players in the space start to message the fact that they won things like runner-up, because that’s when we knew that the Tech Trailblazers award was really cool. It just gave us such a sense of pride.

But in terms of the guidance, I think the fundamentals are probably the simplest thing to impart, which is startups take so much work, and if you’re not willing to put in that work then unless you’re a bunch of McArthur geniuses then you may not be successful. You need a good idea, yeah of course, but execution is the number one element. Every single competitor that you enter into the market to displace has more resources than you do, so you have to work quicker and harder than all of them. That’s kind of our core, I put out a tweet the other day that said I’m routinely doing 100-hour weeks, I’m not saying everybody needs to work that, but it is just a tremendous amount of work to keep the momentum, and you have to really be in it. startups aren’t for the faint of heart.

The other thing I would say is, there’s a lot of trappings that come along with startups, and if you’ve ever visited our New York office you’d find we have almost no concern for frills. It’s like a 10-desk work office that we have right now, and people come in and out of it, but you spend your time and money on things that matter; really know what matters and surround yourself with a team that cares about what matters, not necessarily what feels good, and you can be really successful. But people can get really caught up in trying to be the next Facebook. In the earliest days Facebook wasn’t anything like that, they can pay for that now through their success.

RR: Interestingly, one of our judges did a blog post or newsletter, and I was going to reach out to him, so I am now doing that Ben! So Ben Kepes was talking about people who have the frills and the spills, that that’s not the important thing, that’s not the reason why people have a startup. If you want to buy a boat, or you want to have a fast car or whatever, that is not necessarily the right motivation. I’ve met Ben a number of times, he’s a very down-to-earth guy, he doesn’t go for super trendy stuff. I think he’s trendy because I think he’s very cool but not in that flashier way. So I think from what you’re saying, and it’s also a view that I share, is that ultimately your customers are the most important thing, funding is great, but ultimately you want to preserve the value for the people who come up with the idea as well as provide a great return on investment for your investors, right?

JD: True.

RR: So you can get a lot of money and dilute basically what the core team is going to get out of it in the long run, depending on where you go; or you can run a very tight ship which sounds like you guys do, which is commendable. And although I would very much like to enjoy a coffee with your CEO, I’m very happy to pay for that myself. So, from that perspective I don’t think that anything you’re saying… it shouldn’t be news to people, but I suspect it somewhat is. We’ve become of that view that startups are trendy, glitzy, you have to have all the frills and the free beer, and everything like that, and in reality, that’s nice to have, but I think you guys focus very much on not just your customers but on your team, which I think is really important.

JD: Yes, if you lose sight of it you lose a culture of, I think accomplishment. Frank Slootman wrote a great book called ‘Tape is Dead,’ and it basically said a culture where you’re just heaping praise upon people all day long, it can create a sense of false self-accomplishment. And so we just try to be very pragmatic, very practical, and not get caught up in the trappings, because at the end of the day they don’t change our fortunes, they just kind of dilute the investment that our investors are making.

RR: So, is there anything else you’d like to say, because you’re hopefully on your way to meet the team, hopefully I’ve not delayed you from them because obviously they’re very important guys.

JD: No, no.

RR: Anything else you’d like to share? I was going to say, what else do you do, but if you’re doing 100-hour weeks then you probably only have time to sleep.

JD: That’s pretty much true. Like I said, these things are hard work, and you have to know what you want to get out of them, there needs to be a time when things are done, where you go and recover that personal time. But whilst you’re in it, you have to be in it. I have three amazing kids and I have an extremely tolerant wife of my career, and that’s where I get to spend all my time when not working.

RR: Well that sounds like a great time, kids keep you super-busy for sure!

JD: They do. That BBC interview, I think it was BBC where the kids came into the Zoom call.

RR: Well, wonderful. And are you based in Texas? I assume you’re based… is it New York?

JD: I’m just outside of New York in a town called Little Silver, which is just south of Manhattan.

RR: Sounds fantastic. Well hopefully we will all get an opportunity to meet up in person in the future, and perhaps we’ll see you over on this side of the pond in the UK, or at some event over in the States.

JD: Yes, I hope.

RR: So Jeff thank you for joining us.

JD: Thank you Rose.

RR: It’s such a pleasure to get to know you a little bit better. I wish you and the team a fantastic, continued success, and we’ll obviously be watching that with great interest, and keeping an eye out for your announcements from April 6th onwards. So, thank you very much for joining us.

JD: Thanks for having us, thanks for the award, to all the judges from the Trailblazer – I guess judger panel? I don’t know how you call it.

RR: Our Tech Trailblazer Judges, panel of judges.

JD: Okay the Tech Trailblazer panel of judges, thanks to all of them and look out for us next year because we’re definitely going after the award again.

RR: Fantastic, we look forward to that. And that was Jeff Denworth who is the Chief Marketing Officer and co-founder of VAST Data who are our Storage Trailblazing winners in 2020, wishing them best of luck. Obviously, you can listen to Jeff and others here on the podcast, and we look forward to hearing more about their success moving forward. If you’d like to hear from more of our founders you can find us on the usual channels for podcasts, and please follow us on social @techtrailblaze on Twitter, and Tech Trailblazers on LinkedIn, and we’re at techtrailblazers.com. I’m Rose Ross, co-founder and Chief Trailblazer at the awards.

Thank you, Jeff.

JD: Thank you Rose.