“From the Courtroom to the Conference Room” An interview with Mike Burshteyn, CEO, CryptoMove

As CryptoMove's Founder & CEO, Mike Burshteyn drives all company business strategy and execution. Before starting CryptoMove with his father, Boris, Mike was a cybercrime and data protection attorney. At Perkins Coie he worked with leading technology companies like Google, Uber, Amazon, and Microsoft, as well as startups in hypergrowth, on data privacy, security, intellectual property, and computer crimes. Mike was the #1 ranked college debater in America at UC Berkeley.

What does CryptoMove bring to the marketplace?

CryptoMove protects data with continuous fragmentation and moving target defense. Current data protection methods leave sensitive data, keys, and secrets as an easy stationary target at rest. CryptoMove’s key vault product is all about protecting authentication tokens, API keys, application secrets, SSH keys for cloud services, and secrets for containers and Kubernetes. Developers who do cloud native development or use cloud services, today, find it difficult to manage keys and secrets at scale. CryptoMove has this revolutionary technology that can help to solve those challenges.

If you're working with cloud services, if you're working with containers, an effective secrets management tool like CryptoMove can increase your speed of development, make life easier for developers, and also provide additional security.

What was your motivation while building up CryptoMove? What was your drive pushing you forward?

It all started with my co-founder and our CTO, Boris. He invented this technology. For decades during his career he was building distributed systems and he was always thinking about how to do that more efficiently and more effectively. Thinking about the question of “what happens if encryption fails” led Boris to developing CryptoMove. When he needed a business partner, that's when I ended up quitting my job and joining in. By the way, we are a family business — my co-founder is actually my dad. TL;DR: my dad invented this technology and needed help with the business so I jumped in.

What do you think is the most challenging thing you're facing at CryptoMove?

That's a great question. There are so many challenges with a startup all the time. I think that right now the biggest challenge that we are facing is this idea of how do you scale the organization. We've been experiencing a lot of growth: new customers, new users, new team members. Every time that you experience significant growth in the company it seems like everything has to get rebuilt in terms of the processes, whatever everyone is working on and whatever everyone is focused on. Being able to do that rapidly and in a way that maintains a really high standard for execution is a big challenge.

Can you tell me a little more about your background before starting CryptoMove?

I grew up in the Bay Area and my parents are both software engineers. They used to work at all kinds of startups and tech companies. When the dot-com bubble burst, I remember asking my parents “where did the traffic go?” because all the roads cleared up. So, I kind of grew up around tech. I ended up in college at Cal - most of my time was spent on the debate team,  where we were ranked number one in America. We would research all sorts of different topics and actually one of the things that I researched quite heavily was cybersecurity and data protection. After college, I ended up working at a startup. It was a great opportunity to learn a little bit about all the different ups and downs and parts of the startup, and I ended up starting my own ecommerce business focused on debate research for students, which was fun.

Soon after college, I ended up going to law school and became an attorney. As a lawyer, I ended up in this practice group at Perkins Coie doing data security, cyber crime, intellectual property, litigation, and privacy. We were working for technology companies, startups, big ones, small ones. I had a lot of exposure to cleaning up messes, such as API keys improperly checked into GitHub. Now, coincidentally, CryptoMove’s product is meant to avoid that. Meanwhile, my dad was working on CryptoMove in stealth, prototyping it. We were helping with the patents and standard legal work. What he really needed, though, was a business partner. So I went to my bosses at the law firm and they encouraged me to take the leap. That was about 3 years ago.

Out of all of your experience, what do you think best prepared you for your current role?

I don't necessarily think any one thing prepared me. Frankly, every day and every challenge we encounter is something new and unique. It’s all about being flexible. My approach is generally to try to learn as much as possible from people around me. There seem to be a lot of startups where founders knew they wanted to start a company and they took a very deliberate path towards doing that. In the case of CryptoMove, it kind of just happened and wasn’t necessarily our plan. We're just trying to do the best we can, taking advantage of opportunities.

Going back to the first day of working on your startup, what advice would you give yourself?

Apply to the Alchemist Accelerator, which we actually did. Not on the first day, but a couple weeks afterward. I would definitely do that again. I would just try to iterate as rapidly as possible. I think that's something that I would say could benefit any startup. Create a hypothesis, test it quickly, and iterate and move on. CryptoMove today, our product, our go to market strategy, everything about the company, could not have been predicted 3 years ago. It took a process of rapid iteration. That’s been really important.

What was the most valuable thing you learned from Alchemist?

Alchemist was huge for CryptoMove and for a lot of companies in our class. We were first time founders and even though we had a lot of startup experience, we had never raised VC funding. Alchemist set us up for our first investor, Tim Draper and Draper Associates. We met at an Alchemist Investor Feedback Summit. Alchemist set us up with our first customer, which was the Department of Homeland Security via a scouting program they had, that led them to look at Alchemist start ups. Just working with Danielle, Ravi, Ash, and everyone helped give us the building blocks of the common pitfalls that you face in a startup. Even now, Danielle is an observer on our board. We have continued to work closely with Alchemist. Across the board it was really valuable to us.

If you could do Alchemist again what would you do differently?

I think that there are things that we did while we were in Alchemist that in retrospect we shouldn’t have done. For instance, we spent a lot of time going to a bunch of pitch events with corporations. In some cases they were helpful but there is a lot of corporate innovation tourism that is easy to get sucked into. When we were working on our product and asking users for feedback, that was the most valuable thing. In many cases, corporate innovation teams are just cycling through Silicon Valley almost like they are at a zoo. It’s a common pitfall for a startup, especially at that early stage. When you meet with big companies you think you can get a big contract with them, but in reality they’re just enjoying the scenery and taking some notes on startups. Alchemist calls this “corporate tourism.” Just to take note of what really qualifies a lead and whether there is corporate innovation tourism going on can save a lot of wasted cycles.

What entrepreneurial lesson took you the longest to learn or are still learning?

I think that there are different lessons for different people. For me one of the biggest adjustments I’ve had to make is that in a startup there are ups and downs every single day. Especially as the company gets bigger, you could have massive wins in one area and fires in another area happening simultaneously. You can’t ride that emotional rollercoaster. Also, since I was a lawyer and I was a litigator, I was doing a very specific type of work that required being extremely aggressive, either defending client interests or going after cyber criminals. There’s a shift in style. There definitely was an adjustment period. I can’t write long emails anymore and definitely don’t check all my punctuation. Obviously, you can’t negotiate a business deal the same way you negotiate a settlement in a lawsuit.

What constitutes success for you, personally?

For me, for my co-founder, and I think, for everyone at work, success at CryptoMove means different things for different people. But, we all are excited about what we’re doing, about building a new product from scratch. Take CryptoMove’s technology, this idea of moving target defense and moving target data protection, which no one has ever heard of before. People think it's crazy when they first hear about it. We’ve got this really innovative technology, patented globally, that is really changing how organizations such as our government and military protects its data. That is exciting. In some ways success is being able to do it for another day, because it means we’re growing. Startups are always on a fixed timeline. There's a runway. You're always trying to get to that next level. As long as we can wake up and keep doing it, we know that we're succeeding.

Do you have any insights that you want to share to the next generation of Alchemist Accelerator founders?

It is really great to take advantage of the Alchemist network. There are people with expertise in different areas and you can fast forward a bunch of learning by engaging with the right people. At the same time, you have to really be careful about applying advice to the specific context of your business. I think that there's so many resources, especially in the Alchemist network that can be leveraged.

Do you have any insights for the next generation of entrepreneurs who are specifically manipulating and working with data?

When it comes to data, in the security space and for security startups, it's such a crowded (and overfunded) market that it can difficult to stand out. We've done certain things, like making our product SaaS first. We really focus on our users, which are developers, devops people, security engineers, rather than just trying to sell to IT managers. It’s a very different approach than what you'll see with most security startups. In today and tomorrow’s worlds, data may very well become the most important resource—as impactful and as distributed as oil. Given this, CryptoMove’s data protection innovation via fragmentation and continuous movement and mutation is vital.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley — including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

“Breaking Down the Path to Entrepreneurship”: An Interview with Gil Allouche, CEO, Metadata

  

Gil Allouche is a tech entrepreneur whose passion for artificial intelligence (AI), big data, and growth marketing led him to start Metadata in May 2015. As the Founder and CEO of Metadata, Gil prides himself on building a customer-first company. He is part of an ambitious team that is committed to solving a major problem that B2B marketing and sales professionals face -- generating qualified, opt-in leads. Prior to Metadata, he ran marketing for Karmasphere (now FICO), Qubole and Silver Spotfire (now TIBCO).

Could you explain a little bit more about what Metadata brings to the marketplace?

Metadata is a technology software company in San Francisco. We are disrupting the B2B marketing space. We automate the marketing operations role with automation and AI. There are many tools in the B2B marketing space for tag management and email marketing automation and advertising and data vendors, etc. What Metadata does is connect all of those tools together, learn what worked and what didn't work, and then orchestrate operations from within those technologies using an API, so that people don't have to log in every morning and manually operate those tools. That's the big vision.

Today we connect about 40 different tools in paid media and do anything from sourcing audiences to getting all of their PIIs and cookies, etc. Then, we execute campaigns on social media, retarget, and optimize all of those campaigns automatically using KPIs from Salesforce and market automation from the customers. We have about 60 customers. Some of them are enterprise and some of them are mid-market and startups.

Can you tell me a little more about your background before you started your startup?

I’m a software engineer. I’ve written code since I was a kid. I moved to the U.S. about 12 years ago to do my MBA at Babson College, an entrepreneurship school in western Massachusetts. After that, I spent eighteen months running product for B2B companies. Then I moved into the marketing realm. I was a very technical marketing manager, so I relied on 3rd party contractors to do my copy and communications. But, I had complete responsibility for on demand generation, making sure that my counterparts have a pipeline to go and sell. I did that in three companies. Two of them got acquired. At the third one, I was the first business hire. I was in a small team in a tiny room, and today Qubole is a few hundred people.

After doing that for about 7-8 years I had to choose whether I wanted to continue my career as a CMO (Chief Marketing Officer) and just work for bigger companies, or switch into the entrepreneurship realm, which is what I'm interested in, and build a product that will serve those non-technical CMOs and enable them to do what I did, but much easier. I started a consultancy with Qubole becoming my first customer. Three years later, this is where we are.

What previous experience do you feel best equipped you for your role right now?

Having the experience from both sides, as the software builder as well as the marketing software user. Building systems with AI, building Web products in the first part of my career and then switching up to doing an MBA led me to understand the business side of things and which software can solve for critical business KPIs. Then choosing the marketing space I wanted to innovate in, and then working as a CMO in a B2B company, gave me both points of view. All that prepared me for building the right software and serving the customers.

I started software companies before, and I'm always passionate and excelled in that type of culture, without everything set up, An unstable environment and high risk, that's where I thrive and every year we exist makes me better entrepreneur for the future.

Do you believe that having a technical background first and then understanding the business side of things is the best background to have? Or do you believe learning the business side of things first is more important?

It's hard for me to say because I'm already subjected to the way my career went and so it’s hard for me to roll back and say maybe there’s a better way. I think I'm well equipped to run Metadata because I have a technical background and then I had the customer experience. Would it be better the other way around? Maybe. I don't know many people who have done the other way around.

The vast majority of people that I know in my position have a technical background and they know what's possible to build to begin with. They build it in an amateur way using scripts, which is exactly what I did for eight years while I was running marketing. Then, after seeing it working, I built some of the tools myself, used them in my role and then built a generic solution for the rest of the market. It would not have been possible to do that the other way around because I wouldn't even know it's possible to fix using software.

If you could go back to the first day of your startup, when you were still building Metadata up, what advice would you give yourself?

Probably spend more time building the software. Maybe give delivery more time, building something small, focused, and that was more of an MVP (Minimal Viable Product). In my mind my MVP was more of a VP and not so minimal. It was more of a bunch of different tools put together. I think I would’ve focused on building something more holistic, but more minimized. It took us about a year to bridge that gap to what we have today.

I probably would have invested a little more in engineering and product earlier on. Today that’s our main focus I’d also recommend reaching out to all of your colleagues, former managers - those will be your first customers, advisors, investors and will give you friendly needed feedback. Finally - I think it’s critical you learn how to manage your own psychology. Starting a company can be a tough journey and you need to learn to forgive yourself, adapt quickly and include others in your journey.

What do you think is the most valuable thing you learned from being a part of Alchemist?

I learned a lot from Alchemist. I learned about how seed investors perceive companies. I think I'm good at it, thanks to Alchemist. I also learned how to pitch my company, self development and reaching my first paying customers using CAB.  That was very helpful and Alchemist definitely helped me do those. And finally the network, connections and practical 1:1 programming. Big shout out to Danielle and Ravi who are always there.

If you had to give some advice to someone in Alchemist right now, what kind of advice would you give them to make the most of the experience?

I think you have to come to Alchemist with something to offer already, meaning some technology or customers, and then take that raw material and build upon it. If you don't have much, I would recommend to wait a quarter or two until you do, because otherwise you're going to waste your time in the program.

Another piece of advice I have is to start the program before the program starts. Danielle and Ravi will attest that I was in touch with them maybe two or three months prior to the program starting, doing email campaigns to get investors, asking advice about evolution and about the rest of the things that I had challenges with before the program started. So, moving at your own pace with the leaders of Alchemist I think was the key success factor for me.

Finally, pick your battles in terms of what you want to participate in Alchemist and what you don’t. Running a business that already had some traction, I did not want to stop everything and attend every talk that Alchemist had. Rather, I wanted to keep running the business and use Alchemist whenever I saw fit, maybe 40 percent of the capacity or maybe 50 percent of the capacity. I don’t know if Alchemist will be happy with me sharing this, but that's how I set it up, and it was very successful for us because it allowed us to keep the business running, and then use Alchemist for the things that we actually needed help with. Versus, go line by line with a program that was not always fitted to us because some companies were in a very different stage. We already had 30K MRR. and were kind of already started.

Given your background, do you have any advice for other foreign founders?

Being in the U.S. I would say visiting the U.S. and going after local companies with what is called the customer advisory board (CAB), a tactic that Alchemist educates about, is a great idea. Coming here, doing the activities, being at the office, I think is very important. I would also say, bring your team members with you to Alchemist. You need them involved, and not just your founders. You want to bring your co-founder and whatever the team is and bring them into the program and get them involved.

I would say especially for foreign partners to begin the process of reaching out to Angels and Seed Investors prior to joining Alchemist and work hard on getting some funding prior to the demo day. We got some money at the Investor Feedback Summit and we got some money prior to the program even starting. That was very helpful for us to give us a good sign that the strategy of Alchemist works, prior to the program even starting. It was very helpful, especially for a foreigner who was not very knowledgeable about those things. That’s a piece of advice I would give someone who's coming from a different country to Alchemist.

Was there anyone in your life that helped you as a mentor and influenced you a great amount? If so, what about them helped you?

I'm very lucky to have many mentors. I think I wouldn’t be able to get where I am without them. Some of them belong to Alchemist, some of them belong to Alchemist network, some of them don't. First one that I had goes all the way back to my high school teacher who gave me confidence and belief that I didn't have in myself back then. That’s the first one, back when I had some issues in high school. Then, if I take it all the way to Metadata time, my first advisor, outside of Alchemist, was Mickey Alon, a serial entrepreneur from Israel. He helped me get started with my very first pitch decks, etc.

And then one of the other very prominent advisors I had to date, I would say my strongest advisor, was Bill Portelli. He is from the Alchemist network. I met him at an Alchemist event and he's been tremendously helpful with all things Metadata from sales to personnel issues, etc. Other wonderful advisors who constantly tell me things how they are include Boris, Derek, Jean, Bobby, Jonathan, Gary, Eli and the list goes on. Maybe that’s another important advice - get your advisory board early on and keep them engaged. They can do magic.

And I would say that Danielle has been very helpful. You know Danielle is kind of the de facto manager for Alchemist. She makes a lot of things happen and she's also very good at advice and very resourceful. I think she provided great advice and mentorship at times when I needed it.

What are you excited about for Metadata in the coming future?

Growth. We are onboarding more and more customers than ever before. The last four months have been stronger than the previous twenty-four months before them. We're seeing a good amount of growth. We're also seeing a lot of confirmation from the market that what we're doing is the future of marketing. So now it's a question of how quickly can we leverage that growth with the value, raise more capital, and then grow the company. I’m excited about the next stage of the company moving from 60 customers to 200. Having a fifteen person team to having a thirty person team. I'm excited about those challenges.

What constitutes success for you personally?

Success is to see a product that you really needed in the market being used by enterprise companies like Amdocs, Hitachi, and SugarCRM. Having companies like these use the product, successfully renew, excel, and giving us testimonials and case studies. For me that is success. That means that the initial idea that we had and the solution to that problem that we thought exists, these are confirmation for a product market fit. That's the first piece of success for a company at our stage.

The next success would be a big institutional venture capitalist standing behind us with a large sum of capital to grow, and of course reaching profitability. For me a personal milestone that I'd like to achieve. Those three things I think are the major successes in relation to Metadata.

Are there any other insights you've learned that you want to share with the next generation of entrepreneurs?

I think the biggest thing to do for an entrepreneur is to get started. To unblock your own limiting thoughts of “what needs to happen before I’m ready to start a company.” Nothing has to happen. You just have to start it and then break down the path to entrepreneurship through small wins. To put the first landing page together, talk to the first 20 prospects, talk to the first angel, put it on Facebook. Share it. Don't be secretive about your startup. The moment that you think you're ready to, if you have a problem that you're very passionate about and you have the domain expertise, you shouldn’t wait a second, you should just start it and then let it grow and let the market reject your idea or execution. You may have to switch, to change your idea, change your execution strategy, change your partners, what have you. Or if you see that it's gaining traction then just continue to roll with whatever is coming at you.

I would say that the biggest hurdle is for people to change their mind and say I'm an employee now and today I'm an entrepreneur. Nothing's doing it for you. You have to do it on your own. The best way to get it is to just start taking action. You don't have to resign from work right away, just devote 3 days or a week to it for a few months and you should be able to see some progress before you make the switch completely. That’s that's the biggest hurdle I would say for entrepreneurs.


About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures/year. Learn more about applying today.

An Interview with Cor Winkler Prins, Founder & CEO, 4me, Class 18

Cor’s professional goal is to help the Enterprise Service Management (ESM) industry reach its next maturity level by providing easy-to-use functionality for the support of SIAM (Service Integration and Management).

In 2010, he co-founded 4me to make it easy for all support domains (IT, HR, Facilities, etc.) within large enterprises to work seamlessly with each other, as well as with their managed service providers (MSPs).

In 2003, he helped the ITSM industry establish a new benchmark: the 30-day IT Service Management implementation. By using the predefined processes and detailed work instructions of the Alignability Process Model, and combining that with role-specific training material, a pre-configured ITSM application, and a standardized implementation methodology, it became possible to implement six processes within 30 workdays.

In 1999, Cor helped the IT Service Management industry move away from highly customized implementations based on different interpretations of the ITIL best practices by developing the Alignability Process Model (APM). This was the first comprehensive set of integrated IT Service Management processes that include detailed work instructions for IT professionals. The APM has subsequently formed the basis of all other ITIL-based process models, such as BMC Software's Service Management Process Model and HP's Service Management Reference Model.

What exactly is your startup bringing to the marketplace?

We provide an enterprise service management tool, which essentially is a self-help portal for enterprise employees. When they get stuck or they don't know what to do, and they need help from the Human Resources (HR) departments, or the Legal Department, or from IT, they can submit a request using that self-help portal, or use the app on their smartphone. We route that to the party that should provide that kind of assistance—and that can be an internal department, like the HR department or the IT department, or an external company, to which the enterprise has outsourced a service. For example, this might be the payroll service or the legal service. If all contracts are reviewed by an external legal firm, and that firm also uses 4me, they would link up their 4me environment with the environment of their enterprise customers. When that legal department or somebody coordinating the legal activities of the company wants to pass a request from one of the employees to get a contract reviewed, for example, then they just shoot it off to that external firm using our tool. In the background, we keep track of all the agreements that the enterprise has with the different service providers that employees in the core business rely on.

What was the motivation in creating this company?

In Silicon Valley today, there are a ton of Enterprise SaaS applications being created. Within an enterprise, the employees of the marketing department, for example, go to trade shows and they see something like MailChimp that they like and want to use. They come back and they talk to the IT Department, and then the IT Department says “I don't know, it’s a cloud solution, we’re not familiar with the cloud, and we don’t have anyone to set it up for you.” If the marketing department is persistent enough, then the IT department will hire a consulting firm that has experience with MailChimp and will ask them to set it up. They’ll do a quick security check before purchasing to make sure it meets the necessary requirements. Then, this external firm will set up the MailChimp environment and integrate it, maybe with Salesforce, or with the corporate website, which might run on WordPress.

Once it's running, everything is fine, but then the marketing department wants to do a particular campaign, and for that, they will want to create something special on the corporate website. That needs to be integrated with MailChimp again, so they need to call back the consultants. Or they might discover a bug, or they want to upgrade, but basically every time the marketing department wants to do something special, they need to rely on these consultants. Over time, these consulting firms that specialize around certain technologies like MailChimp or WordPress or Salesforce – they keep getting repeat business from the enterprise. But, as people within the enterprise run into issues with the service, or they have questions or requests, they’ll send requests to the IT department, but they don't have any expertise in how to configure or reconfigure these Enterprise SaaS applications. What they do instead is, over time they establish such a tight relationship with all these different consulting firms that they use for these different technologies that they start to demand service level agreements. This is really good for the external firms, because it means recurring revenue—very steady and reliable. What the enterprise then wants is to have an easy means of collaborating with external firms, and tracking the quality of service that they're getting from each of their external providers.

That is basically what is lacking in the enterprise service management space, a tool that can link enterprise customers to all the different parties that provide services to them. Then, the companies don't have to retype every request that they get from their employees into a different service management tool for one of their external providers. They get accurate reporting on the quality of service that they're getting, and the providers get the same information about the quality of service that they are delivering to their customers. So, when there are issues, they know that there is an issue, that the data hasn't been manipulated by either the customer or the provider, and that the data is reliable. This lets them simply concentrate on making sure that the issue does not recur.

What do you think is the most challenging matter that your company is facing right now?

In the enterprise space, there are a couple of things that you really need to have sorted out well. The first thing is security. That extends immediately to privacy, particularly if you're doing business globally like we are. You have to take very strict privacy regulations into account, particularly in Europe where the GDPR came about last year. That has a huge impact on providers like us. We need to make it easy for our customers, who store, for example, HR data—which is very sensitive. We need to allow these large organizations to prove to auditors that they are doing everything that can reasonably be expected to keep their employees’ data secure. When something bad happens, they need to know how to respond, and how to coordinate that, and they can use a tool like ours for that. Most of our customers in Europe do so. But, there are additional things that our tool needs to be capable of, because of the GDPR. For example, in our tool, a lot of focus has been put on being able to audit what has happened in the past. The GDPR on the one hand demands exactly that, but on the other hand, if an employee, for example, demands from the company that the data is erased, which is “the right to be forgotten” in the GDPR, then the tool needs to be capable of removing the entire history, the entire audit trail.

Most enterprises, they demand that their providers are SOC compliant. Services like ours, and many Enterprise SaaS applications, process data from these organizations. We need to be able to prove on a regular basis that your tools are being submitted to advanced security testing, penetration testing, by a reputable firm. We need to be able to provide the audit  reports that our customers require. It's all pretty standard for large enterprises. For us it means that we pay a significant amount every year, simply to stay compliant for our large enterprise customers. Their auditors will come and check. It is very costly to do that, but it’s necessary to play in this space.

Can you tell me a little bit more about your background before you got started and how that prepared you for what you're doing now?

I've been in this industry, the service management industry, for more than 22 years. I grew up with a new methodology, a new set of best practices that were initially published in the U.K. This set of best practices is called the IT Infrastructure Library (ITIL). It quickly became popular worldwide, but the thing that we started to do is to build tools to support those processes. The first company that I helped set up, together with our CTO, Laurens Pit, a co-founder of 4me, sold to Hewlett-Packard. For us, that was the first time that we went through this cycle. Later on, me and Laurens both went our own ways. I started a company focused on service management, more on how to properly deploy service management in very large organizations on a global basis. We licensed intellectual property on that to specialized consulting firms around the world. We sold that company to BMC Software, which at the time was the leader in the service management space. Laurens later sold his company to ServiceNow, which had then just become the leader in the service management space. By combining our experience, we decided that we had sufficient background to take on these more established players, like ServiceNow and BMC Software.

We found that they were completely missing the boat on the cloud, although ServiceNow would definitely disagree with that, of course. They should be applauded for getting organizations onto the cloud with their service management solutions. However, they did it in a way that did not fully make use of all the capabilities that the cloud offers. Essentially what they did is provide a separate infrastructure for each of their customers. It's virtualized, but it doesn't allow for collaboration between organizations, which  is where they are now lacking. When we saw that misfit, between what was happening in reality, with enterprise companies selectively outsourcing more and more of their services, and what the service management tools on the other hand were providing and the direction that these tools were going in, we thought that this was silly. Because in a couple of years, there will be organizations who run into a wall because they simply won’t be able to manage the large number of providers they have to deal with on a daily basis using their traditional enterprise service management tools.

What made you want to apply to Alchemist?

We had been in existence for a few years before we applied to Alchemist. We bootstrapped the company and were not in need of additional funding, because basically we had sufficient customers to cover our costs. Whenever we signed up more customers for our service and had more revenue coming in, that’s when we would add more people to the organization, not before then. So, we were not making a profit because we were reinvesting every dime that we received from customers into the growth of the company. The reason why we decided to join Alchemist is because we wanted to establish a narrative for investors. Ultimately, the goal for us is to do an IPO. At that time it has to be a logical narrative for future investors. We’ve identified a number of stages in our path from where we were at that time to IPO. On the investment side, we realized that we needed to get some funding to accelerate. Particularly in the areas of sales and marketing, where we had little experience, we needed to bring some people in.

What we decided is that we’d sign up with Alchemist, which is very well-respected in Silicon Valley by other venture capitalists (VC’s). They would be able to open the door with other VC’s. Neither myself nor my cofounder went to Stanford or MIT, and we needed a way to establish more context in Silicon Valley. That’s what we were looking to Alchemist for, and that has been very successful. Even before we graduated from Alchemist, we were able to secure a funding round from Storm Ventures, which also specializes in Enterprise SaaS.

How would you describe your experience at Alchemist?

I really enjoyed it, and I learned so much. When you’re working with your product, mainly on a day-to-day basis, and trying to get more customers and look at features that set your product apart, you really have to switch your mindset at Alchemist to think about growth. Not just from one customer to the next, but thinking in broad strokes. In thinking of ways to get there, you’re thinking about funding as one way of helping you, but when you have funding, you need to find out what you’re going to do with it. You don’t have time to think about that during the day. Having certain topics addressed on Thursday evenings was really nice, because it helped us look at our company from a different angle, which always sparked new ideas.

What do you think would define success for you and your company in the next 12 months?

We’re trying to gain market share, and we primarily measure our growth by  the number of users on our services. We track our ARR, and in the past few years, we’ve been pretty consistent in growing at about 50% ARR YoY (year over year). Ideally, if we do things right, we should grow a bit faster than 50% this year. That is always what we’re shooting for every year – that we get our sales and marketing so well-organized that we manage to sign up more customers, more quickly.

What insights would you want to share with foreign founders, and the next generation of founders more generally?

I believe that the focus on SDR’s (Sales Development Reps) – sending out emails, hiring sales reps, setting up sales calls to make appointments for demos, etc., no longer works. A few years ago, when it was new, it worked. These days, people get so many of these calls that they’re no longer effective. That has been a focus to some extent during the sessions at Alchemist, but I think it’s time to start looking at alternatives, like teaming up with industry analysts, seeing how you can use trade shows, seeing how you can carve out your niche. That is something Alchemist helps with quite a bit. There were a few sessions that focused on that, and gave us some great ideas.

For the foreign founders, I believe that it is essential to be in the Bay Area. I don’t think it’s wise to think you can get VC funding here, while not being here. I always tell foreign founders that they also need to be a Delaware C Corp. I also tell them that it’s basically impossible to hire someone in the Bay Area if you’re living abroad. If you do manage to hire them, why didn’t they already have a better offer? It’s better to source talent in Eastern Europe, where people are super well educated, and not cheap, but affordable by Bay Area standards. If the founders are from India or Europe, and have a good understanding of the local culture, they should be able to manage people in their country of origin, from the Bay Area. The other thing to keep in mind for foreign founders is that it’s really hard to get visas. I’m a green card holder—I had to renew last year, and it was incredibly painful and time consuming. If you’re traveling with an expired green card, even if you applied for renewal at the right time and have a temporary extension, it becomes painful every time you re-enter the US. Why not just work remotely with your colleagues so they do not need to come to the US?

What are some highs and lows you’ve had in the last month?

One of the highs recently was an email I received from the legal department of a large managed service provider (MSP) that we’ve been working with to establish a partnership. We’ve been working with them for over a year already, and it’s taken a lot of time to go through their incubator process of looking at new technologies that they can use to get a competitive advantage. The email included a signed reseller agreement, which was the major milestone we’d been hoping for. A big low would be when one of your people who you’ve been training and investing in, leaves because they can earn 150% of their salary with another, bigger company. I don’t blame that person at all, because we can’t realistically match the offer, but it does set you back. The highs and lows come on a daily basis. You need to be able to stay in the saddle, particularly during the first few years, which can be an emotional rollercoaster—but also the fun part. Some people thrive on that, the adventurous nature of startups. That’s one of the things I really enjoyed about Alchemist—you could tell when one of the founders in your class had a rough day or a rough week. It was so helpful for someone to be able to tell their story and feel the support from the group, even just the emotional support. As a founder, you can really feel alone sometimes, especially when the rest of your team is abroad.

What skill or lesson has been the hardest to learn, and has there been anyone that really helped you become a better founder?

Pitching. I was not good at providing a decent pitch. At Alchemist, it was super helpful, not just to get practice, but also tips about what to do and what not to do. It extends not just to pitching VC’s, but also talking to customers. At a certain point in time, when you’re talking to CIO’s or C-Level Executives, they don’t care about the functionality of the tool anymore, they care about the vision. When you can paint that vision for them, if they get grabbed by it and feel like joining you on that journey, it’s wonderful. Alchemist has helped with that a lot.

At Alchemist, the book recommendations were also really helpful. Each and every lecturer had something to teach us, some little nugget that we could take home with us and stew over, in addition to all the other things we learned. It opened a world that I hadn’t paid much attention to. I really enjoyed developing a new skill, like pitching, and it was definitely worth improving in that area. The experience was certainly worth it.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures/year. Learn more about applying today.

“Founder-friendly” ...until you stall


Founders who are in the midst of their fundraising roadshow will pitch VCs who say they are “founder-friendly” in regards to how they work with founders to help them build their companies. Here are 3 tips to connect the dots between the self-proclaimed founder-friendly VC’s mindset and the tough, but fair, conversations they will have with you when your business hits some road bumps.

Tip 1: “Friendly” might not mean what you think it means

If your startup has multiple founders, it is typically the CEO co-founder who is the point person to negotiate the term sheet. As the CEO co-founder, you need to have the self-awareness to accept that the VC acts as the corporate stewards in the best interest of the company, their LPs, founders, and employees. The rubber meets the road when your startup has a critical business issue. It could be the business is not performing at the hockey stick growth level, or that the company's brand was hurt by a devastating Human Resources (HR)-related issue due to company culture problems.  

Great CEOs have self-awareness. They understand everyone is friendly when you are hitting your sales targets. But when you miss two consecutive quarters of revenue, or when your startup is on the front page of the WSJ or TechCrunch for a HR issue, there are consequences. The way the CEO leads and the speed it takes to navigate the startup out of the storm will dictate how long the relationship remains friendly.

Tip 2: Deal Terms exist to de-risk, not to offend

VCs and founders work with law firms to deploy billions of dollars a year in venture funding. There are few bad actors and no two term sheets are exactly the same. There are also many deals that fall apart. That is why founders are encouraged to get multiple term sheets. But a term sheet with a lower valuation than you expected or aggressive downside protection doesn’t mean the VC is not founder-friendly. It means that your traction, net revenue, growth, and maybe the A team, is not in a place to give you leverage in the negotiation. That is what is reflected in the term sheet deal terms.  

The more uncertainty the Venture Fund has in your business, the more they will want to protect their downside and their LPs’ investment. Traction and revenue growth will drive better terms. Be willing to re-engage with investors who have passed on you in earlier rounds. Plenty of VCs miss deals that they wish they could redo.  

Tip 3 The intersection between founder-friendly and board governance

The CEO co-founder is the only founder who reports directly to the board. It is the board’s role to hire and fire the CEO. This is an interesting dynamic when you have multiple founders. No matter how you package it, the lead Series A Partner will sit on your board and will have the power to be not-so-friendly when the business is not performing. Again, this doesn't mean they can’t empathize with the sacrifices founders have made. At the end of the day, the board needs to ensure the company is growing and that CEO is the right person to make that happen.

About Darren Kaplan


Darren Kaplan is the Managing Director of The Last 90 an early-stage venture fund that invests and operates companies that are redefining the future of work. Prior to that Mr. Kaplan was the co-founder of hiQ Labs, a data science company, informed by public data sources, applied to human capital to make work better. Mr. Kaplan is an Alchemist Accelerator Selection Committee Member and Mentor.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The Accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The Accelerator seeds around 75 enterprise-monetizing ventures / year. Learn more about applying today.

An Interview with Na’ama Moran, CEO of Cheetah, Alchemist Class 2

Na'ama Moran came to the US from Israel to study economics, math and political science at Cornell. After school, Na'ama joined NYC’s emerging markets hedge-fund, Greylock Capital Management, as an analyst. She left finance to pursue her dream of building products that make people's lives better with technology. She moved to Silicon Valley where she concurrently took classes in Computer Science at Stanford and co-founded Zappedy, a services platform enabling local businesses to close the loop between online marketing and offline sales. The company was acquired by Groupon in 2011. While working at Zappedy, Na'ama encountered a large variety of restaurant owners and food entrepreneurs. She discovered the hardships of running a restaurant and was surprised by the lack of transparency and ease-of-use in such an important marketplace. She decided to do something about it. Na'ama met cofounder Peretz Partensky while camping together at Burning Man. The two started working on what would eventually become Sourcery and raise $5M in funding. Her experience at Sourcery  led to her founding Cheetah Technologies to be the easiest, fastest, and most affordable way for small-medium businesses to get their daily supplies and services. In her spare time, Na’ama loves to practice yoga, hike the beautiful Bay Area trails, and read science fiction books.

What exactly is your startup bringing to the marketplace today?

My company today is like an Instacart for small businesses. We enable businesses to order their daily supplies from their mobile phone, anytime and from any place, and connect to a large network of local and national wholesale suppliers.

What was the impetus behind starting that? What made you think this is a good idea? What was the inspiration behind this venture?

I've worked with small businesses for the last couple of years, initially with restaurants in my previous business, Sourcery. What was really interesting about this market is the lack of transparency and the lack of a convenient way for small business owners to manage their daily purchasing and know product  pricing in advance. The way they manage their businesses is very antiquated. By accessing wholesale suppliers that are priced transparently on our app, and building this alternative supply chain, we’re enabling small businesses to have access to both local and national vendors, and benefit from a very convenient same day or next day delivery.

Can you talk a little bit about your background before the startup?

I worked in finance in a hedge fund for a couple of years right out of college. Then I moved to the Bay Area and I've been doing my own startups since then. For the last couple of startups  I've run, I've been working with small business owners primarily in the food service space. That gave me insight into the types of problems they were having.

Is there any previous experience or situation, either personally or professionally, that you felt helped prepare you for this startup? Was that working in finance or working with food services? Is there one thing that helped prepare you for what you're going through today?

I don't know if there was one thing. I think it's the connection of all the different businesses I’ve been doing for the last ten years. All of those startups taught me something different about finding product-market fit, building a scalable business, building and scaling a team. At my previous company Sourcery, which is the company that was enrolled in Alchemist, is when I got most familiar with the problems of small restaurants and small businesses in the food service space. It gave me deep familiarity with the problem and the impetus to come up with a solution.

On the topic of Alchemist, what made you apply to Alchemist?

I really like Ravi and his focus on the B2B space.I thought they had a very strong network of mentors.

Now that you've gone through Alchemist, what do you think was the most valuable thing you took from going through it?

It has a very strong network of mentors and alumni that is valuable for early stage startups. Especially people who are creating very large businesses in the B2B space and have a lot of knowledge and experience to share. The preparation for the demo day was very useful as well.

What is the most challenging matter you guys are currently facing? Fundraising, talent recruitment, product development?

I think recruiting in the Bay Area continues to be a very challenging endeavor, because the environment is so competitive. I would say being able to recruit top talent continues to be our biggest challenge. Our business is operations heavy and therefore, the various challenges we are facing have to do with scaling operations.

Can you talk through one of the highest highs and lowest lows of the last month?

We've grown our topline by more than fifty percent on a quarterly basis, compared to last quarter. This is definitely one of the highlights. One of the low moments we had, had to do with  recruiting. We gave offers to people that we really wanted to bring onto the team and they we were not accepted. This was pretty disappointing.

Looking to the future, what constitutes success and what are your goals in the next twelve months?

Being able to meet or exceed our goals would be a strong indication that we had a successful twelve months. We have certain projections and they're pretty aggressive so being able to, as they say, “meet them or beat them” would be really good.

What entrepreneurial lesson or skill do you think took you the longest to learn or are you still continuing to work on?

I think there is a skill in finding product-market fit. Unless you get lucky, you need to develop this skill in a very methodical, focused way. I believe I have been able to develop this skill over time, but I'm sure there is still a lot to be learned. Today, with my current company, I think we have a proof that we have found product-market fit and the biggest challenge is to scale the business very rapidly and be able to confront very strong competition in our markets. The challenge is different. The challenge is really about scaling a business and being able to sustain it, rather than figuring out if we have product-market fit.

And so if you could hypothetically go back to yourself on the first day of your startup, what advice would you give yourself?

Be able to let go of bad ideas and bad people faster.

Is that similar to the Silicon Valley saying, “Fail quickly, fail often”? Is it better to get through a bad idea and move on to something good than to hold on to it?

Yes. Being able to let go of bad ideas or bad strategy or bad people a lot faster probably would have made me successful faster than I have been.

Do you personally have any advice for founders who are not from the US?

It’s all about the network you build here. For people who are not from the US, it might be a little bit harder to build their networks. Being able to build a network as fast as possible is probably the biggest advice I can give.

Has there been anyone specifically that helped you get to where you are today, that you think you wouldn’t be here if it weren’t for them?

There are various people like that. Some of my investors have been incredibly supportive and informative in helping me to get where I am. There have been people I work with and colleagues that have been instrumental in helping me get to where I am today. I don't think there is one person. There are multiple people, between investors, colleagues and mentors, that I can point to.

How did you get in contact with soe of these people and develop that relationship? That is something a lot of founders struggle with, building networks and trying to get to know these people. They find it really hard.

It’s a good question! It's just a matter of always trying to make connections or initiate meetings. Even if the meeting doesn't necessarily work out to provide you what you want, ask the person to introduce you to other people that could be useful. Just constantly build that network with every meeting that you have. Be able to build a network through friends. I went to Stanford for a certain period of time, I met some people there. I went to Alchemist and YC, these are networks I am a part of. All these different organizations are ways to build those networks.

Of all the jobs you can have, startups are more on the intensive side. The types of people that start companies, tend to have a passion for it. For you, whether it be five or ten years from now, what constitutes success for you personally and this venture? What would make you feel this was all worth it at the end of the day?

I think it would be the impact I end up having on the lives of my customers and employees. Hopefully, I will see some significant monetary return for my efforts as well. I'm doing this  to really have an impact and change the way people are doing business, and change the way our employees are living their lives. Creating wealth for both my customers, employees is my number one goal and inspiration.

About the Alchemist Accelerator

Alchemist is a venture-backed initiative focused on accelerating the development of seed-stage ventures that monetize from enterprises (not consumers). The accelerator’s primary screening criteria is on teams, with primacy placed on having distinctive technical co-founders. We give companies around $36K, and run them through a structured 6-month program heavily focused on sales, customer development, and fundraising. Our backers include many of the top corporate and VC funds in the Valley—including Khosla Ventures, DFJ, Cisco, and Salesforce, among others. CB Insights has rated Alchemist the top program based on median funding rates of its grads (YC was #2), and Alchemist is perennially in the top of various Accelerator rankings. The accelerator seeds around 75 enterprise-monetizing ventures/year. Learn more about applying today.

An Interview with Edith Harbaugh, CEO, LaunchDarkly, Alchemist Class 8 (Ocho)


CEO and co-founder of LaunchDarkly Edith Harbaugh has raised over $30M in funding from investors at Uncork, DFJ, and Redpoint. She has more than 10 years of experience in product, engineering and marketing with both consumer and enterprise startups. Edith was Product Director at TripIt, where she launched TripIt for Business and ExpenseIt. She holds two patents in deployment. Edith earned a BS, Engineering from Harvey Mudd College and a degree in Economics from Pomona College. She enjoys trail running distances up to 100 miles.