Tape Sucks
Inside Data Domain, A Silicon Valley Growth Story
by Frank Slootman
2011 Frank Slootman
Table of Contents
Introduction
Silicon Valley has been birthing renegade technology companies for the better part of a century. The storied lineage traces from Stanford's Fred Terman to the Varian brothers' Klystron amplifier, from the hallowed garage of Bill Hewlett and Dave Packard to the bold "traitorous eight" who fled Shockley Labs to form Fairchild Semiconductor. These companies, to be sure, broke new science and engineering groundyet their most lasting legacy may well be their pioneering approach to business itself. They blazed a path that led to Intel, Apple, Oracle, Genentech, Gilead, Sun, Adobe, Cisco, Yahoo, eBay, Google, Salesforce, Facebook, Twitter, and many, many others.
What causes a fledgling company to break through and prosper? At the highest level, the blueprint is always the same: An upstart team with outsized ambition somehow possesses an uncanny ability to surpass customer expectations, upend whole industries, and topple incumbents. But how do they do it? If only we could observe the behaviors of such a company from the inside. If only we were granted a first-person perspective at a present-day Silicon Valley startup-cum-blockbuster. What might we learn? This documentthe story of Data Domain's rise from zero to one billion dollars in revenueis your invitation to find out.
For anyone curious about the process of new business formation, Tape Sucks offers a provocative, ripped-from-the-headlines case study. How does a new company bootstrap itself? What role does venture capital play? Why do customers and new recruits take a chance on a risky new player? Frank Slootman, who lived and breathed the Data Domain story for six years, offers here his clear-eyed, "first-person shooter" version of events. You're with him on the inside as he and his team navigate the tricky waters of launching a high-technology business. You'll feeldeep in your gutthe looming threat of outside combatants and the array of challenges that make mere survival an accomplishment. You'll catch a glimpse of an adrenalin-fueled place where victories are visceral, communication wide open, and esprit de corps palpable.
I first met Frank about ten years ago, when he was one of the new chieftains at Borland Software (a celebrated Silicon Valley firm that was under new management and retooling to become an enterprise software company). I was the CEO of a small, high-growth software startup that Borland was interested in acquiring. Borland wasn't the only company courting us about an acquisition, but in the end Frank was the most persuasive.
What you discoverusually within about thirty seconds of meeting himis that Frank is direct and unafraid. What you learn over time is that he is also ambitious, full of integrity, action-oriented, a bit restless, intrinsically competitive, economically minded (meaning frugal but also facile with econometrics), athletic, and a wide reader and student of history. I used to enjoy observing Frank hold court in his office as he got pitched on the latest product or sales opportunity. He would wait patiently until the speaker's prepared remarks eventually tapered off and the real conversation could begin. Frank has an independent vision of the world that doesn't seek or especially seem to need outside endorsement, and he expects you to either conform to it or convince him where precisely his thinking might be unhooked. This can be a difficult task, but when it is accomplished, Frank reorients himself unreservedly and embraces the new frame.
Frank has put to paper here a detailed, candid accounting of Data Domain's trajectory as experienced by a principal. For some reason, when journalists, technology beat writers, or business historians write the story of a high-tech company, they tend to lapse into clichs, cobbling together uncritical news clippings and friendly interviews in a kind of luke-warm, assembly-line synthesis. No insight. No point of view. No soul or fire. As you will quickly sense, Tape Sucks is the opposite of such books: As an honest, informed perspective on technology wave riding, Tape Sucks allows you to observe things at close range and get an unvarnished picture of how it really worked for Data Domain.
The upshot is that the principles of the early entrepreneurs of Silicon Valley are alive and well. Their straightforward ideas include employee-ownership, tolerance for failure, unfettered meritocracy, faith in the power of technology breakthroughs, a preference for handshakes and trust over contracts and lawsuits, pragmatism, egalitarianism, and a belief in the primacy of growth and reinvestment over dividends and outbound profits.
May the fresh, true story of Data Domain prompt you to "Go, and do likewise."
Eric Mller
Society of Kauffman Fellows
Palo Alto, California
TAPE SUCKS: Inside Data Domain, A Silicon Valley Growth Story
by Frank Slootman
I was CEO of Data Domain, Inc. from the summer of 2003 until its acquisition by EMC during the summer of 2009. At the time I joined, Data Domain had about 20 employees, no customers, no revenues, and a few units in field test. With a few million dollars left in the bank, we were months away from running out of money.
During the next six years, Data Domain grew to sell more than all its competitors combined. We broke the billion-dollar sales barrier in less than seven years, adding more than one thousand employees and six thousand enterprise customers worldwide. We were seen as the "eight hundred pound gorilla" in the space, but we sure did not start out that way.
Why write this?
Having been part of a recent successful venture, I regularly receive invitations to speak and consult with aspiring audiences. I find myself repeating my observations, and wanted to produce a text that is better articulated than my always off-the-cuff commentaries and recollections. Also, with this source document, in-person discussions quickly accelerate past the basics and become more pointed, resulting in more productive exchanges.
Inevitably, there is also potential for business success stories to be so embellished over time that they become unrecognizable; when that happens, the learning becomes more the stuff of legend than history. By creating this time-stamped account while events are still fresh in my cache, I hope to check this natural drift toward aggrandizement for myself (and perhaps others as well).
My background
I still say I was born on the wrong continent. I immigrated to the US from my native Holland, the only "apple" that "fell" so far from the family tree. This society's premise of personal responsibility, individual liberty, and free enterprise stood in stark contrast to the Euro-style social welfare state of my youth. In America, everybody wanted to get ahead, entrepreneurship was celebrated, and people were born optimists. Where I came from, people seemed more resigned to their fatepersonal success was frowned upon, even mistrusted. I held a long time fascination with America, and instantly felt more at home here than I ever had in my land of birth.
It was hard getting my first real job here in the US in the mid-1980s, as the economy was not good then, either. I recall IBM rejecting my application at least 10 times in different places. I wanted to work in tech, seeing it as the future, but my alien credentials didn't help.
I arrived here with an advanced degree in business and economics from the Netherlands School of Economics, Erasmus University Rotterdam. In contrast to the prevailing attitudes of the times, academia in Rotterdam was a business affair. I remember the faculty dean telling us new recruits on our first day of school, "we're here to crank out entrepreneurs!" I liked it! Since my graduation in 1985, they have repackaged the curriculum as RSM (for Rotterdam School of Management), and the school now has international acclaim and credentialsbut in my day, nobody over here had heard of it.
