Welcome to the NVCA Blog series, Building Better, where we celebrate the dynamic relationship between our VC members and their innovative portfolio companies around the nation. For today’s Building Better, we spoke with Tim Guleri, Managing Director at Sierra Ventures, and with Hiro Yoshikawa, CEO & Co-founder of Treasure Data, a Sierra portfolio company. Learn about their partnership in the Q&A below!
Sierra Ventures: Tim Guleri, Managing Director
Give us some background on Sierra Ventures: How did the firm start, what is your mission and how does the firm strive to meet its goals?
Sierra Ventures is a Bay Area based early-stage venture firm investing globally with a focus on Next Generation Deep Enterprise and Emerging Technologies. The firm started back in 1982 and since then we’ve invested over $1.9 billion out of 11 Funds. Sierra’s mission is to provide best-in-class support to help entrepreneurs and founders grow their companies from idea to exit. We have created a vast network of successful entrepreneurs, Fortune 1000 CXOs, operational executives, and deep domain experts, providing a platform for entrepreneurs around the world.
What does Sierra Ventures look for in a partner when choosing to invest in a portfolio company? What does Sierra Ventures value? What do you value in the Treasure Data team?
When investing in companies we look at 1) explosive new categories (in our Core or Evolving sectors), 2) a team that’s an 11 on a scale from 1 to 10, and 3) a founding team with the passion and focus on building a large, sustainable business.
In 2013, after selling an early big data company, Greenplum, to EMC, I was looking for a cloud big data next generation play. When I met the Treasure Data team, I was blown away by Kaz Ohta’s technical brilliance and ability to build elegant software that was performing at massive scale with a very small team. Hiro Yoshikawa, the CEO, on the other hand, came across as this “Jedi Master” who could close deals with customers without breaking a sweat. We built a great relationship as we spent time together. They had a lot of VC interest, but once we had a handshake, even though it was still raining VC term sheets, these guys didn’t look back and we moved forward with the investment. From the initial phases I knew this was going to be the beginning of a long and productive partnership, which just ended more than 5 years later with a $600M sale to ARM (Softbank).
How does Sierra Ventures support its portfolio companies? How does it help entrepreneurs grow and advance the VC industry?
We typically are the lead investors for our companies. We are hands on, helping with everything from introductions to high level customers and talent, to strategizing and building operating plans and refining sales strategies. A great example of this is the category creation of the Customer Data Platform (CDP) – which evolved to Device Data Platform (DDP) – that came from a strategic conversation Hiro and I had with the Chief Digital Officer of Nissan, Madhu Nutakki, who’s on the Sierra CXO Advisory Board. He came to meet Treasure Data at their offices. He saw the need for connecting data coming from devices – in his case, cars – and linking it to Nissans’ enormous global marketing spending. Based on these interactions, we “coined’ these categories, and this positioning was what initially attracted ARM to the company. We were particularly pleased that our 75+ member CXO Advisory Board provided the initial creative spark for the new category.
Treasure Data: Hiro Yoshikawa, CEO & Co-founder
What is the mission of your company and how did you start? How has your partnership with Sierra Ventures helped you fulfill your mission?
As a company, we have a very strong belief that technology is not technology, regardless of how “great” we think it is, unless it generates value to customers. This is the very clear DNA of our company and a clear secret to our success. Working with Tim and the Sierra Ventures team, we could tell right away that they’d have our back while supporting our vision. They provided relevant and company defining insights and were willing to do the hard work with us. On top of that, Tim and the firm were already aligned with the key pillars of Treasure Data – humility, extreme candor, and openness. This trust and support were key for us to build a business that provided real value to our customers.
What problem is your company trying to solve for?
Our goal is to drive immediate, actionable insights by translating millions of data points – online or offline, and primarily from disparate IoT devices. We empower teams, which are very distributed, to break through organizational silos to glean immediate insights that drive company growth. We started with a big data solution for IT focused on employees working with our Customer Data Platform but morphed it in 2016 by building a Device Data Platform which provides solutions for tech-savvy marketing groups by centralizing device generated data with customer generated data. One of the customer quotes that I’m still very proud of came from the Warner Brothers’ VP of Analytics after he was very successfully onboarded. “Treasure Data works as promised.”
Where and how is your company looking to grow into the next 5 years?
We are now a standalone part of ARM and their first company in the DDP space. ARM’s strong vision is to turn a very successful semiconductor IP design company into the world’s leading IoT company. What ARM’s executives were envisioning was very similar to what we were thinking in terms of DDP. The acquisition by ARM closed in July 2018, and our platform is now the core data platform of ARM’s IoT strategy.
How has Sierra Ventures impacted your company for the better?
Tim and Sierra Ventures were recommended to us for our Series A because of their extensive background in Enterprise Software and Data Technology. In addition to Greenplum, they were early investors in Teradata. Tim showed up to our first meeting on crutches (he had broken his leg playing soccer) and he spent the first few minutes very calmly, yet humorously explaining what happened. This set a warm tone heading into our pitch. Tim’s feedback was solid but not stifling throughout our pitch and I felt great wisdom from him. His personable nature and his passion for technology and how the world could be transformed by it continued all throughout our relationship, and he provided motivation to me during the many tough moments. I remember when I had to terminate one of our top management members for the first time in my CEO career, and I was so nervous. When I let Tim know about my decision and my personal struggle, he wrote, “Thanks Hiro, as I like to say, ‘it’s not the wrong decisions that kill you it’s the slow ones’”. I still have this email. Tim totally got my struggle as a first time CEO and he had my back and pushed me forward. I often pulled up his note whenever I had concerns with my decisions.