Amr Awadallah, CTO of Cloudera, discusses building startups around scalable problems. He emphasizes being your own customer to validate the problem, achieving product-market fit, and expanding internationally. He covers acquisition strategies including acquihires and filling product gaps like Cloudera's Gazank security acquisition.
Chapters
So in my tenure at Yahoo, when I was working at Yahoo, I was responsible at Yahoo for doing business intelligence and data science and data analytics for Yahoo Mail, Yahoo Sports, Yahoo News, Yahoo Finance and so on. So I got to try the— I was the customer, in other words. I got to see the headaches, the problems, what needs to be changed and that gave me a very deep understanding of that problem space. And that's what made me think that hey, this product that we want to build is really the best aspirin for this headache. We had to make the assumption and this is where entrepreneurship and risk comes in that that headache, that problem is going to be a common problem across the world. And in fact at the beginning of Cloudera, many of the other investors that did not give us money, so there was investors that said no, were skeptical. Is that headache something that only you, Amar, experienced and maybe your co-founder Jeff experienced at Facebook? Or is that something that all companies will need? Now luckily it ended up being something that all companies need. I don't know if you should— you're moderating. Is it okay to take one more question? Yeah, let's do you and then one more question and then I think we're out of time. So that sounds like a good endorsement. Do you have any other words to say about being your own customer, solving your own problem? I think definitely being your own customer and solving your own problem gives you a much stronger advantage in terms of coming up with the right solution. So I think it is very useful. It also gives you the passion thing because if you were your own customer, then the belief and the passion becomes much stronger and reinforced. However, I would say you also want to calibrate it by not making it— making you blind about what other people need because sometimes maybe that's only your problem. Maybe you're the only customer for that thing that you're thinking of and nobody else in the world cares about it or maybe 10 other people care about it. So you want to balance that by still going beyond yourself. So in companies, there is a number of stages that you pass by, right? So in the beginning phase, you're trying to find what's the problem I'm solving. As I said, you're solving a problem. So in the beginning phase, you're trying to find what's the problem I should be solving. The second phase is did I build the right product to solve that problem, which is actually one of the riskiest phases. We already achieved that. So we found the problem and we found the right product to solve that problem, which is— and then the next stage is market fit. Is that a solution and a product that the market wants to buy right here, right now? And the U.S. is one of the best places for enterprise software companies because such a big captive market all speaking the same language. We did that. And then the next phase, which is the phase we're in right now, is the scale phase. Now how do I scale that? How do I take that and make it worldwide? And that's exactly the phase that we're in right now at Cloudera. So over the last year we started expanding in a number of new geographies. For enterprise software companies, Europe is what comes next. So we— 2 years ago we started building out a team in Europe. And then after that tends to come Asia, tends to come after that, especially Southeast Asia. And then after that, South America. South America comes. So we are right now just starting building out a team. Were you going with your own company or acquiring another company? Oh no, we're building our own in this case. Why? Because we— first, we do acquire companies, so it's a good question. I'll get back to that in a second. The reason why we haven't been acquiring companies for expansion is that there isn't actually that many other companies in these geographies doing the exact thing that we're doing. that we will benefit from. That said, at Cloudera we did make 5 acquisitions so far. So we did acquire 5 companies. And we tend to acquire companies in one of 2 cases. The first case is acquihire. So acquihire meaning it's a bunch of people that we think are super smart. They have a product that is kind of okay but it's not really what we want. We're not buying them for the product. The product shows that they know what— That they think well and that's why we acquire them. So these tend to be small acquisitions on the order of what the Yahoo thing was for myself. And then the other reason why we acquire is we are acquiring to fill a big gap in our product roadmap, right? So for example, we had a big gap in our security. Our platform didn't have all the security features that some of our security-conscious customers wanted. So last year we acquired a company called Gazank which filled that gap for us. A third reason why you would acquire, which is we haven't done that at Cloudera yet, is expansion, right? So hiring a company that helps you expand your customer base.
