Alumnus shakes up the world of cloud storage
CEO and Co-Founder, Backblaze
San Mateo, Calif.
When Gleb Budman and his four co-founders launched Backblaze, an online-backup service, in 2007, they were determined not to raise capital. They actually turned down offers from VCs and had only a small angel round near year two. “We were worried funding would influence the direction of our product and the culture of the company,” Budman says.
The bootstrapping gamble paid off, leading to the custom-built servers that have made Backblaze a standout in the field. Three clicks and Backblaze automatically finds, encrypts, and saves all of a user’s files, regardless of size or type, to an off-site location.
“If we had raised funding first,” says Budman, “we would never have built our own cloud storage.” Instead, Budman says, they would have followed a path similar to other companies: use Amazon cloud storage first, at a loss, and figure out the innovations later.
The Berkeley Haas community has also been instrumental to Budman’s success. “My connections continue to be valuable and helpful in building the business,” Budman says. Classmates have offered angel funding, advice, client introductions, and more. He also approaches problems with strategies he learned in class.
One such issue arose with Backblaze’s $5 price point for unlimited monthly storage—a fee that hasn’t changed since the company’s inception. The low cost led some in the tech industry to initially speculate that Backblaze’s storage wasn’t actually unlimited or that it was burning through secret VC funding. But Backblaze stores more data than its competitors—150 petabytes so far—because of its innovative hardware and software. Budman squelched these rumors by posting the server’s proprietary design specs online in 2009.
The post has been viewed more than a million times. “It established us as a leader in the space,” says Budman, who holds five patents on security. Engineers and operations people have applied for jobs because of it, and fans of Backblaze’s technology are quick to defend it against skeptics on social media.
Five years into the company, Budman and his co-founders finally agreed to seek funding to accelerate growth—but only with investors who wouldn’t be making hiring and firing decisions. “We wanted a partner who valued the way we wanted to run the business,” Budman says. They teamed up with TMT Investments, which offered $5 million. Backblaze has since grown to nearly 40 employees.
While Backblaze was cash flow negative during its growth period, it eschewed raising more funding and instead brought the company back to profitability. “If we can’t sustain our business based on the number of customers we have then we’re doing it wrong,” Budman says.
And now, a new service is poised to help its bottom line. The company recently launched Backblaze B2 Cloud Storage, a competitor to the $5 billion cloud storage market dominated by Amazon, Google, and Microsoft. Backblaze’s solution is just one quarter the cost of them all. “It’s definitely a David vs. Goliath situation,” Budman says, but he’s confident Backblaze will prevail with its innovative technology and its culture of being focused, efficient, and creative. —Amy Marcott