This entrepreneur ‘accidentally’ built Gluster, which was acquired by RedHat for $136 million

himansu sekhar samal

 

The world was still reeling from the shock of the 9/11 attacks and the global economy wasn’t prepared for this kind of blow. Yet, for Anand Babu (AB) Periasamy and his team at California Digital Corporation (CDC), it was a crucial time that was spent building ‘Thunder’ – the world’s fastest super computer for the US Department of Energy. From building a supercomputer to founding Gluster and now Minio, it has been a long journey for AB from Mettur Dam in Tamil Nadu.
“My entrepreneurial journey has been a battle with more scars than skin,” says AB. Seated in a crowded room waiting for a fireside chat, it is difficult not to be enthralled by AB’s enthusiasm and sense of wonder. For AB, his entrepreneurial journey has just been an accidental one. He, in fact, never wanted to be an entrepreneur.

Anand Babu (AB) Periasamy

One look at the CPU and it was love at first sight

“If I were left to my devices, I would be in a quiet room simply hacking Open Source. I don’t consider myself smart. In fact, I wouldn’t even have done my engineering if it hadn’t been for my mother’s support and encouragement. It was her dream that I become an engineer,” adds AB.

His love for computers and Open Source began in the ninth grade, when he first saw a computer. Defining it as love at first sight, AB says that the only thing he wanted was making machines do his bidding. Ever since, it has been his endeavour to know everything about computing.
All AB needed was a computer with good Internet access. He even hacked his way into getting this in 1999. While working at NextGen in Delhi, the Internet was limited to a few employees. So, when the service would start in the evening, and the port numbers restricted, AB would hear the modem sound, detect the port scan and connect to the service. Soon, people started asking for help and AB even ran a proxy service on his machine.

Survival of the fittest

“At one point, I decided to go to the IT department and tell them we could do a better job. I reworked the infrastructure and installed Linux, which made the system better. Soon, I took over the IT department,” adds AB. Interestingly, AB’s entrepreneurial journey began with an idea to do social service. Coming down to Bengaluru, AB and his friend embarked on an endeavour to bring the Internet to rural India.
Hailing from modest backgrounds, both AB and his friend knew that they needed jobs to survive. This is when the opportunity at CDC happened. AB decided to join part time, but soon joined full time as CTO. AB took on the job full time because had had brought in other people who were hacking on free software, so now he had their responsibility as well.
While things were going smoothly and the team was getting big clients, the CEO of CDC decided to shut the hardware and free software business and focus on the proprietary software business. Now unemployed, and with a team that was his responsibility, AB knew he had to find a job not just for himself, but his team as well.





He attended several interviews, but nobody was working on free software at the time, and AB was only interested in hacking free software. “If you tell me I can’t share my ideas and it’s restricted, it just doesn’t make any sense to me. I just cared about hacking on free software,” adds AB. So AB and his colleague Hitesh Chellani – the last two people at CDC – were forced to start a company.

Building a core offering in free-time

Taking in some angel funding from Hitesh’s brother-in law, the duo started Gluster in a small bedroom. Ironically, the storage software was built during what AB calls ‘their free-time.’ “We were doing all kinds of work like embedded systems porting and anything to keep our burn low, and the storage work was done in our free time,” says AB.
It was only in the end of 2007 and early 2008 that they realised that the market was warming up to the idea of the cloud storage platform. Coincidently, when Gluster took off, the housing bubble burst in the US, and the market went from bad to worse.
While, every other storage company was building proprietary hardware appliances and had spent great deal of money building a seasoned executive team, the Gluster team was small and had zero storage experience.
While the competition was talking about EMC certification, their model was simple – you had to download the software and use it. It was free and built on Open Source. Then, in what was possibly the worst market scenario, Gluster got funding from Nexus Venture Partners.

“By 2010, the industry started calling us the RedHat of Storage. And then RedHat told us you should be RedHat Storage and the company got acquired”. AB adds that times were rough, and he was living in a one-bedroom apartment and driving an old Cadillac. “For me, nothing else mattered and it was matter of ethics hacking on free values. There were times when I would stay in server rooms so that I could hack,” he says.

Co-founders for life

After RedHat, where AB worked for three years to help with the transition, he just wanted to sit at home, drink lot of coffee, and teach himself theoretical mathematics. “I just wanted to learn and solve different problems in Mathematics and Physics. I wanted to do fun projects like Bionics, and taking human intelligence to the next level,” says AB.
He thought that if he didn’t work on another startup, he may as well stay at RedHat and take the retention bonus. Around the time the deadline was approaching, his next startup– Minio.io – took shape.
Against all his plans and ideas, AB re-entered the entrepreneurial fray. And this time, it was for his wife.

“It is my responsibility to be involved in her accomplishments as well.  My wife was very instrumental in my life, apart from my day to day struggle and bringing in the discipline, she worked as my co-founder at every step. She gave new perspectives and made me see the right choices,” says AB.

AB Periasamy with wife Garima and kids

While he started to work on a bionics idea, AB realised that it would require resources, time and research. So he picked another problem and decided to build an open source Amazon S3 alternative. The key difference is that Minio is free and easy and even a beginner developer can download it.
“You would think that an entrepreneur is just creating things, but in reality, it is just a small part of his or her world. Entrepreneurship is about managing people and making sure that everyone else is successful along with you,” says AB.

How Lightspeed discovered budget hotel network Oyo and the journey thereafter

Himansu sekhar samal

 

Oyo is like a first baby to me. It is special. And the tale of how we discovered it is an interesting one. Oyo did not happen through the usual prospecting methods that VCs follow. It was rather serendipitous.

I love watching Sarah Lacy’s (PandoDaily) fireside chats. They throw insight into the mind of the entrepreneur/investor and tell inspiring stories. One late Saturday night, I logged onto YouTube to watch her conversation with Peter Thiel. During the chat, they talk about Peter’s ‘20 Under 20 Fellowship’programme. Peter is a strong advocate of young people choosing alternative paths instead of college education. Under the programme, Peter’s foundation grants USD 1,00,000 to 20 students who are under 20, to drop out of college and work on something revolutionary. I was intrigued by some of the examples (14-year-old kid building a nuclear reactor) and decided to learn more about these bold, visionary entrepreneurs who were doing amazing things instead of spending their time in college.
The current year Thiel Foundation fellows included two Indians. Ritesh was the only one doing something here in India. I reached out to him on LinkedIn and followed up with a Skype call as he was traveling to San Francisco.
The first conversation with Ritesh was mesmerising. Somewhere buried in Oravel’s introductory deck was the idea of Oyo. Oravel was a plain aggregator, much like an online travel agency (OTA), but Oyo was a fully integrated model that controlled customer experience right from discovery to booking, and all the way to the stay and check-out. This 19-year-old had traveled for months staying at budget hotels, attended customer calls everyday and immersed himself in every possible experience to learn about budget hotel customers and their expectations. That was the kind of on-the-ground learning that helped him pivot Oravel to Oyo. At Lightspeed, we gravitate towards entrepreneurs who build their consumer understanding bottom-up – Ritesh clearly stood out.
Subsequently, I arranged for Ritesh to meet Bejul, who was at SF as well at that time. Bejul had tracked the online travel sector for more than five years and met startups trying to connect travelers to budget hotels before. Internally, we had a point of view that a light touch aggregation approach is not likely the right one, given the nature of hotels in India. When he met Ritesh and learned about Oyo’s model, which had more control over the inventory and customer experience, he believed it to be the right answer. The fact that Ritesh had arrived at this conclusion based on his market experience and had the courage and conviction to pivot from the original model gave us important insight into his ‘learning orientation’, a characteristic we value highly in an entrepreneur.
We decided to spend more time with Ritesh and the team at Oyo to learn about the opportunity. Quintessential to Lightspeed’s diligence approach, we planned to experience, firsthand, the consumer experience at budget hotels.
That same weekend, I visited Mahipalpur – an area near the Delhi airport, which has about 50 budget hotels in a small stretch of less than two km. I knocked on the doors of eight to 10 hotels and pretended to be a medical representative who frequently travels to Delhi and is looking for reliable options at an affordable price. Learning from these conversations was mind opening in many ways.

Ritesh Agarwal, Founder and CEO of Oyo Rooms

On the demand side:

• It was extremely difficult for a consumer to gauge the experience “XYZ residency, inn” would offer. Reviews at Trip Advisor and/or pictures on OTAs would not solve experience expectation problem
• Pricing was completely arbitrary. Similar hotels at the same location would vary from Rs 1000 to Rs 2500 a night
• One could never be sure whether the booking will be honoured or not

On the supply side:

• There was a large pool of such hotels in the country
• It was clear that these hotels operated at low occupancy because of competition and a non-definitive/differentiated proposition. Also, they did not have a structured way of capturing demand
• Most of these hotels were not the primary business of the entrepreneur and a ‘general manager’, who usually took care of the day-to-day operations, had little incentive to increase occupancy

As I came out of Mahipalpur and watched the strip again, it finally dawned on me why an Oyo should exist for every 10 hotels in this strip. And if it did, the occupancy of the other nine hotels would gravitate towards the one Oyo, which is a national brand and one that people can trust. Today, there are more than seven Oyo hotels in the same Mahipalpur strip.
Bejul and I subsequently visited the three Oyos that were operating in Gurgaon and met their owners as well. A sleepy residential lane in Gurgaon had several of these budget-stay options, which further cemented our market depth thesis. It was also clear from our conversations with the owners that the Oyo model was working and that they therefore treated Oyo like a partner who has access to complete inventory rather than a marketing channel (e.g. OTAs). Interestingly, when we spoke to the OTAs, some of them did admit that this was a huge opportunity and they had themselves thought of capitalising on it. But it required a completely different organisation and it would be very tough to execute.
Oyo was still very young and in a state of transition:a few hotels and less than 10 people in the team, some of whom were part time and working from a different city. Ritesh and Anuj used to double up as call centre agents, business development executives and all that could possibly be there in the middle. We recognised that Oyo was in its cradle and would require enormous amount of company building. But our conviction in Oyo stemmed from our point of view of the opportunity, signs of early product-market fit, a belief in what the company could become and the clarity in Ritesh’s thinking and vision.
It has been an awesome rollercoaster ride so far. We are proud and fortunate to be a partner on this journey with Oyo, a startup that can truly claim that it is ‘disrupted in India’ unlike most models which become successful first in the West and then get copied here. Oyo for ‘X’ – primary care, diagnostics, schools, auto-service centres is quickly replacing Uber for ‘X’.
Oyo will celebrate its presence in 100 cities this month. It has a world-class team that strives to make it the largest network of technology-enabled hotels in the world. Ritesh is now 21, a dreamer who operates with clarity of purpose, speed and conviction that is a defining trait of successful entrepreneurs.
Watch out for the next post in this Oyo blog series ’How Oyo built a world class team’

Two second generation entrepreneurs take on the $150B construction market online

     Himansu sekhar samal

Two dynamic individuals, both of whom had taken on the real estate industry when it was undergoing absolute turmoil in 2009, happened to meet for the first time at a workshop at ISB, Hyderabad in 2011.They were given the task of establishing the youth wing of CREDAI, the industry body in North India. The knowledgeable duo had learnt the ropes of the traditional construction business, but was brimming with ideas to give it a futuristic twang. As they put their heads together to chart the trajectory for the real estate industry, Mohit Goel had his Eureka moment – noting the need for all developers to develop a mechanism for collective purchasing, which also struck a chord with his creative-other half Nalin Saluja.
Although the idea didn’t take off then, the seeds were sown. Four years later, in September 2015, it blossomed into Supplified.

L to R: Nalin Saluja and Mohit Goel, founders of Supplified

 The duo
Both Mohit and Nalin come from business families, with their fathers being their life mentors. Mohit, 26, was born in Palwal, a modest town south of Faridabad, and holds a BCom Hons from DU. His father made it big in life starting with a mere Rs 500 in his pocket, and ended up establishing one of the largest real-estate empires in north India. “And every new entrepreneurship lesson was brought to the dinner table,” Mohit says.
After his first job at Grant Thorton as a consultant, Mohit joined his father, and successfully got the company out of the real estate turmoil in 2009. On the other hand, ex-Goldman and Sachs employee, 29-year-old Nalin hails from Faridabad. He moved back to India in 2010 and started working with the real estate wing of his family business, just like Mohit, which gave him six years of hands-on construction experience.
The gameplan
According to a 2013 PwC report, the construction industry contributed eight percent to India’s GDP. Supplified.com is taking this $150-billion market of construction materials and home décor appliances and fittings online. It is a B2B-focussed online marketplace for construction materials. The value creation at its heart is to make the buying experience of construction materials and machinery easy, convenient and efficient- by perfecting their JIT inventory model for an industry where the standard inventory period is about 3 months.
As a B2B offering, there are two marketplaces the company wants to conjure. Already in effect is its e-commerce wing. Another line extension will be Supplified’s foray into sharing economy,  which was the brainchild of Mohit when he realised that there is a massive opportunity to optimise the system, not just for his own company but also for the whole industry. The sharing economy of the developer and contractor community, set to be live in a few months, will have large inventory stocks for materials and equipment that can be shared and rented peer to peer.
“Our main aim is to bringing people from offline to online,” says Nalin. The team is headquartered in New Delhi. “It is the biggest market to start with, considering 20-30percent of India’s construction activity goes on in Delhi-NCR,” he adds.

The Supplified office

“We are targeting the full range of construction companies- right from small and medium enterprises involved in construction work and facility management, to the big developer and builder community. For the former, the team in charge of purchases may not be the most tech-savvy, so the UI/UX was built keeping in mind that it has to be as easy and contractor friendly as possible,” explains Nalin.
To on-board the same section that is set in their traditional ways of buying, Supplified has a 20-people business development team, which goes around meeting small and medium contractors.
Here’s how they’re doing the above, exactly.
If a large company were to buy in bulk, in all probability, they are in direct contact with the manufacturing company and they get very attractive bulk discounts. Moreover, credit facilities available to the buyers in the offline physical market – especially when it comes to cement and steel, always bought in large consignments – is a big incentive for them to continue buying the traditional way.  How is Supplified competing with that?
“By aggregating directly from manufacturer brands, we have put in a lot of effort in achieving the same price discovery. And the manufacturers associated with us are providing credit to our big-ticket buyers. Granted, the smaller contractors who get credit in the offline physical market also get it on low ticket value items, but, according to our estimates, this only constitutes a fifth of the market. We have been able to tap the remaining 80 percent,”Nalin says.
The startup’s sales team nudges reluctant buyers who opt only for high-ticket items into exploring other purchases too.
Bootstrapped with the duo’s collective funds of around $1 million, Supplified currently has 654 registered clients and has clocked sales of Rs 56 lakh in February, growing at the rate of 110percent every month. “We plan to expand to Chandigarh, Ludhiana and other Tier II and III cities by the end of this year. Features such as peer-to-peer rental of machinery and equipment, credit ratings mechanism, are also in the pipeline.” The team is now looking to raise funding this year.
Competing with them in their geographic zone, is Buildzar- a slightly older company clocking Rs. 11 crores in revenues monthly. Many other players have sprung up, albeit in their respective geographic zones –like Msupply, that raised its Series-A, and Buildkar, which raised a seed round last month, in Bengaluru. Econstructionmart is the most seasoned of them all, operating all over Gujarat, Rajasthan and select cities in Uttar Pradesh.