still be around five years from now.
But what about the eye-popping valuations for a few recent consumer tech acquisitions, such as the $19 billion paid by Facebook for WhatsApp? “On the business computing, on the enterprise side, we haven’t seen that sort of craziness,” Artale says.
Cloudera. Artale is, of course, a supporter of Ignition portfolio company Cloudera, the big data platform provider that received a $740 million investment from Intel late last month, part of a $900 million round. Still, he calls this “a magical moment” for the Palo Alto-based company, and harkens back to his days working on the Windows operating system at Microsoft.
In the summer of 1996, Artale recalls, Intel was delivering a chip to its customers that would allow Windows NT to be as fast as competitor NetWare from Novell on server computers for the first time, accelerating the software’s transition from “a technical curiosity” to “trusted infrastructure,” Artale says. “Two months after that processor shipped, [Windows NT] surpassed NetWare in monthly server shipments, and we never looked back,” he says.
He foresees that kind of technical collaboration with Intel greatly benefitting Cloudera.
“Now, the grid processor architects, memory architects, input-output architects at Intel can engage deeply with the team at Cloudera to really understand what Cloudera’s system—and all of Hadoop, a lot of which is in the open source community—really does to the machines,” Artale says. “And because of that the machines can become optimized and more efficient, to enable more use of this for workloads and applications that we haven’t even thought of yet. That is just an absolute force-multiplier for the company, and that validation by Intel is tremendous.”
What’s holding back Seattle startups. While Artale is seeing more and better business-oriented startup companies in Seattle than when he started in 2011, it’s still a fraction of the activity in the Bay Area. No surprise there. Don’t forget how much bigger the Bay Area is.
“You really can’t compare the Bay Area with any place else. Not to Seattle, New York, Boston, London—wherever you go and look at startups. What we see is happening is it’s not necessarily organic activity in the Bay Area, it’s just that people who are starting companies wherever they are in the world are getting them going in the Bay Area. Whether they stay in the Bay Area is another thing.”
Even accounting for the size difference, Artale sees a key shortcoming in Seattle: “The missing ingredient is that the two biggest companies [Microsoft and Amazon] don’t generate general managers in the ways that big companies in the Bay Area do.”
He uses his own experience at Microsoft as an example.
“I was a general manager at Microsoft. I actually didn’t know anything about running a business. I carried a general manager title, but no sales person reported to me. What did I know about creating a sales pipeline? I didn’t have a finance person report to me. [Then Microsoft CFO and current Ignition managing partner] John Connors used to send over three very skilled MBAs with spreadsheets and they used to do it all for me. I didn’t have to worry about it. You go to start a company today, you have to know all this stuff. At least you have to know the questions that you have to ask. And I think that’s not a flaw of the company. It’s just a thing.”
But it’s a thing that means fewer people leave Microsoft with the chops to launch a startup. The region’s high-quality startup accelerators like 9Mile Labs and Techstars, and the growing stable of successful serial entrepreneurs here are helping mitigate this, he adds. Sunny Gupta, co-founder of Apptio, is an example of the latter.
“It takes those people who are willing to do it a couple of times,” Artale says. “These are typically the people that start their first companies in their 20s or early 30s, maybe have a modest or a successful outcome maybe four or five years after starting a company, and then want to go big. And then typically when they want to go big, they know how to go build those companies for longevity, and Apptio is a good example of that.”
