This morning TechCrunch announced that Docker, an enterprise company known for its container technology, has acquired Techstars NYC 2014 alumni Tutum.
Tutum was part of my first Techstars NYC class, and this is literally my very first exit as an investor. As you probably know, the only kind of luck I believe in is hard work, and this case is not an exception.
Borja and his crew work exceptionally hard to get to this win. Here is my reflection on our brief but exciting journey together.
1. Attitude matters
When I first interviewed Borja and Ferndando for the class I was immediately impressed. Not only they really knew what they were talking about, but they had incredibly positive attitude. You could tell that these guys believed they can pull it off.
When a few weeks later I decided to give Tutum the offer to join Techstars in NYC, Borja was visiting his parents in Spain. Before I even finished talking Borja screamed – “You are not going to regret this!” Then he ran out of the room, and ran back in with his mother. Both of them where screaming “GOOOOOAAAAAL!” into my Skype. It was hilarious, human, unforgettable.
2. Team, team, team + CEO
When we select companies to participate in Techstars, the first 3 criteria are all the same – Team, Team, Team. Ideas and markets matter, but the team matters 10x more. Early stage investing is all about the people.
Tutum had a truly rock solid team. Fernando, the CTO, is super technical, super smart, reserved, with lots and lots of fire inside. Graham, COO who joined them later is razor sharp, Bryan, lead marketing, community, and social media, and of course A+ engineers.
In the team of stars, Borja is truly a super star. If you met him, like many of you did, you would know it. He was incredibly smart, charismatic, visionary. Borja is the kind of CEO who knows where he is going, and doesn’t compromise. He is driving, he knows where the true north is.
Time and again, Borja showed incredible focus, and a steady hand. He didn’t budge and didn’t blink. Whether setting product direction or talking about partnerships or fundraising Borja stuck to his vision and it paid off.
3. Background Matters
When Borja and Fernando pitched me back in the Fall of 2013 very few people knew about Docker and their container technology. Because of my background in distributed computing (I was the Chief Architect at Data Synapse, a Grid computing company in NYC back in the 2000s), I immediately got why containers where a game changer.
But what I didn’t know back then, is how much founders background in the space really mattered. Borja and Fernando where true cloud computing experts and geeks. They recognized Docker containers as the next big thing back when very few people even knew what it was. They moved quickly to create the company and ultimately their background led to their ability to recognize the opportunity, move quickly and win.
4. Trends are a real thing
I am now an investor in 38 startups through Techstars NYC and it is clear that trends really matter. Our VR companies certainly get a lot of attention these days. If you aren’t working on the space that’s trendy, doesn’t mean you can’t build a big business, but it actually really helps to be part of the trend.
Tutum was early player in the Docker ecosystem and was able to ride this massive tide. Today, Docker is recognized as one of the most valuable enterprise innovations of the past few decades. Back when Tutum started very few people even understood what Docker was. From this perspective, Tutum is a timely company, and because it was part of the Docker rise, its own rise was accelerated.
5. Engineering Core Wins
One my huge passions is to help create more tech companies in NYC. True to what I said a while back in the Wired magazine article – I am obsessively searching for the best engineering talent in NYC and to bring to NYC. It is my deeply held belief that this is what NYC ecosystem needs to get even better.
In my first Techstars NYC class we funded Tutum, Standard Analytics and Matter. In our second class we funded Cartesian, DataCamp, IrisVR, Localize, Keymetrics, Pilot, Stream, and LSQ. In the current class tech companies include Gorgias, Great Horn, Haubby, Impact Health, Jewelbots, Live Like, Mona and Slash. All these companies have super strong engineering core.
I believe that big reason that Tutum won is because of its super strong engineering core. These guys are real technologists and real inventors. They’ve engineered something that didn’t exist before. I believe that this what defines innovation, creates wealth and value.
6. Board matters
After Tutum graduated from Techstars they got a term sheet from Kirill Sheynkman at RTP ventures. Kirill led $2.7MM seed round for Tutum, but he didn’t just give them cash. Kirill became a true collaborator and engaged super deeply with Borja and his team.
Kirill was the right investor for Tutum. He really got what the company is doing and where the market is going. Kirill had deep knowledge of the space and was able to help the company in ways that a non-technical investor simply couldn’t.
7. Ending is a beginning
Tutum’s journey as a standalone company ends today, but Tutum’s vision is far from being fully realized. Now the team has even bigger challenge in front of them. It is no joke that Docker bought Tutum because they saw Tutum’s technology as a big piece of overall puzzle to make containers ubiquitous in the enterprise.
Now Borja and the team have the opportunity to make a bigger impact on the world. This is by far not simple. Many players in the enterprise market don’t want to see Docker win. The company has to meet the high bar in order to create more value, wealth, and revenues to go public.
Today’s ending is really a new exciting beginning.
I’m THRILLED to have been a small part of Tutum’s journey. Today I am a proud investor, engineer and a champion of NYC tech.
p.s. Please read Borja’s re-cap on Tutum’s blog.