StarZero All shows Try the podcast clipper →

Nov 3, 2016 · 20m · top-founders

EP 467: $60M Raised To Help CIO's Manage Their Cloud with CEO Ben Nye

Ben Nye · 11m spoken Nathan Latka · 7m spoken
0:00 / 0:00

gold bands on the timeline = statements, start to end. Hover to read, click to jump. CC turns on captions

In this episode of The Top, host Nathan Latka interviews Bain Capital Managing Director and Turbonomic CEO Ben Nye to examine the technology behind autonomic cloud management, best practices for startup governance, and the executive transition from venture investor to operating CEO.

How this conversation actually went

Every chapter scored 0–10 on four independent dynamics. Hover any point for the reasoning behind the score. Nathan holds 40.8% of the talking time here. How this is scored →

Nathan as informed peer 4.2 Guest teaching 3.8 Guest disagreement 2.0 Nathan pushing back 3.0
05100:0010:0020:001:30–5:22 · Nathan as informed peer 4/10 Ben Nye's Background and Bain Capital's Thesis Nathan inquires about Bain Capital's investment thesis and the leadership transition at Turbonomic. Ben explains the venture capital stage-agnostic approach and his transition from board member to CEO in a polite, informative manner.5:22–10:15 · Nathan as informed peer 5/10 Managing Cap Tables and Passive Equity Churn Nathan digs into cap table management for departing founders and questions whether perpetual licensing leaves money on the table. Ben clarifies how socket and core count pricing works while delivering quick payback periods.10:16–13:07 · Nathan as informed peer 3/10 Replacing IT Allocation Guesswork with AI Autonomics Ben outlines the shift from legacy IT allocation guesswork to autonomic AI workload management. When Nathan mistakenly asks why VMware was dying, Ben swiftly corrects the misunderstanding by clarifying that VMware was the dominant incumbent and the smaller competing startups were the ones that perished.13:08–16:23 · Nathan as informed peer 6/10 Business Growth, Scale Metrics, and Series D Dynamics Nathan presses Ben to disclose absolute revenue numbers and back-of-the-napkin Series D valuations. Ben resists sharing revenue specifics, prompting Nathan to reframe the question around late-stage dilution strategy.16:23–19:31 · Nathan as informed peer 3/10 Turbonomic's Green Circle Community and Performance Gains Ben describes Turbonomic's Green Circle customer community and operational metrics before moving into Nathan's standard rapid-fire closing questions and outro.1:30–5:22 · Guest teaching 3/10 Ben Nye's Background and Bain Capital's Thesis Nathan inquires about Bain Capital's investment thesis and the leadership transition at Turbonomic. Ben explains the venture capital stage-agnostic approach and his transition from board member to CEO in a polite, informative manner.5:22–10:15 · Guest teaching 4/10 Managing Cap Tables and Passive Equity Churn Nathan digs into cap table management for departing founders and questions whether perpetual licensing leaves money on the table. Ben clarifies how socket and core count pricing works while delivering quick payback periods.10:16–13:07 · Guest teaching 6/10 Replacing IT Allocation Guesswork with AI Autonomics Ben outlines the shift from legacy IT allocation guesswork to autonomic AI workload management. When Nathan mistakenly asks why VMware was dying, Ben swiftly corrects the misunderstanding by clarifying that VMware was the dominant incumbent and the smaller competing startups were the ones that perished.13:08–16:23 · Guest teaching 4/10 Business Growth, Scale Metrics, and Series D Dynamics Nathan presses Ben to disclose absolute revenue numbers and back-of-the-napkin Series D valuations. Ben resists sharing revenue specifics, prompting Nathan to reframe the question around late-stage dilution strategy.16:23–19:31 · Guest teaching 2/10 Turbonomic's Green Circle Community and Performance Gains Ben describes Turbonomic's Green Circle customer community and operational metrics before moving into Nathan's standard rapid-fire closing questions and outro.1:30–5:22 · Guest disagreement 1/10 Ben Nye's Background and Bain Capital's Thesis Nathan inquires about Bain Capital's investment thesis and the leadership transition at Turbonomic. Ben explains the venture capital stage-agnostic approach and his transition from board member to CEO in a polite, informative manner.5:22–10:15 · Guest disagreement 2/10 Managing Cap Tables and Passive Equity Churn Nathan digs into cap table management for departing founders and questions whether perpetual licensing leaves money on the table. Ben clarifies how socket and core count pricing works while delivering quick payback periods.10:16–13:07 · Guest disagreement 3/10 Replacing IT Allocation Guesswork with AI Autonomics Ben outlines the shift from legacy IT allocation guesswork to autonomic AI workload management. When Nathan mistakenly asks why VMware was dying, Ben swiftly corrects the misunderstanding by clarifying that VMware was the dominant incumbent and the smaller competing startups were the ones that perished.13:08–16:23 · Guest disagreement 4/10 Business Growth, Scale Metrics, and Series D Dynamics Nathan presses Ben to disclose absolute revenue numbers and back-of-the-napkin Series D valuations. Ben resists sharing revenue specifics, prompting Nathan to reframe the question around late-stage dilution strategy.16:23–19:31 · Guest disagreement 0/10 Turbonomic's Green Circle Community and Performance Gains Ben describes Turbonomic's Green Circle customer community and operational metrics before moving into Nathan's standard rapid-fire closing questions and outro.1:30–5:22 · Nathan pushing back 2/10 Ben Nye's Background and Bain Capital's Thesis Nathan inquires about Bain Capital's investment thesis and the leadership transition at Turbonomic. Ben explains the venture capital stage-agnostic approach and his transition from board member to CEO in a polite, informative manner.5:22–10:15 · Nathan pushing back 4/10 Managing Cap Tables and Passive Equity Churn Nathan digs into cap table management for departing founders and questions whether perpetual licensing leaves money on the table. Ben clarifies how socket and core count pricing works while delivering quick payback periods.10:16–13:07 · Nathan pushing back 2/10 Replacing IT Allocation Guesswork with AI Autonomics Ben outlines the shift from legacy IT allocation guesswork to autonomic AI workload management. When Nathan mistakenly asks why VMware was dying, Ben swiftly corrects the misunderstanding by clarifying that VMware was the dominant incumbent and the smaller competing startups were the ones that perished.13:08–16:23 · Nathan pushing back 6/10 Business Growth, Scale Metrics, and Series D Dynamics Nathan presses Ben to disclose absolute revenue numbers and back-of-the-napkin Series D valuations. Ben resists sharing revenue specifics, prompting Nathan to reframe the question around late-stage dilution strategy.16:23–19:31 · Nathan pushing back 1/10 Turbonomic's Green Circle Community and Performance Gains Ben describes Turbonomic's Green Circle customer community and operational metrics before moving into Nathan's standard rapid-fire closing questions and outro.

speaking balance: gold is Nathan, purple is the guest (3 minute bins)

0:00 · Nathan 69.1% · guest 30.9%0:00 · Nathan 69.1% · guest 30.9%3:00 · Nathan 38.1% · guest 61.9%3:00 · Nathan 38.1% · guest 61.9%6:00 · Nathan 16.3% · guest 83.7%6:00 · Nathan 16.3% · guest 83.7%9:00 · Nathan 14.8% · guest 85.2%9:00 · Nathan 14.8% · guest 85.2%12:00 · Nathan 28.3% · guest 71.7%12:00 · Nathan 28.3% · guest 71.7%15:00 · Nathan 45.5% · guest 54.5%15:00 · Nathan 45.5% · guest 54.5%18:00 · Nathan 87.8% · guest 12.2%18:00 · Nathan 87.8% · guest 12.2%
Sharpest disagreement ▶ 14:54 Refusing revenue disclosure

Ben directly shuts down Nathan's attempt to peg company revenue above one hundred million dollars, declining to comment on specific financials.

 Hardest push from Nathan ▶ 14:43 Nathan presses for Series D financial metrics

Nathan attempts back-of-the-napkin math on dilution to corner Ben into admitting an annual revenue figure exceeding $100M.

 Biggest teaching moment ▶ 12:45 Clarifying startup failure versus VMware's dominance

Ben immediately corrects Nathan's misinterpretation that VMware was dying, clarifying that VMware is a cash-generating giant while the startups trying to copy it died.

 Nathan holds their own ▶ 9:24 Challenging perpetual license revenue capture

Nathan sharpens the line of questioning by asking whether offering perpetual software licenses causes Turbonomic to leave money on the table when customer usage expands.
the scores for every segment, with the reasoning behind each
ChapterTopicNathan as informed peerGuest teachingGuest disagreementNathan pushing backWhy
Ben Nye's Background and Bain Capital's Thesis 4312 Nathan inquires about Bain Capital's investment thesis and the leadership transition at Turbonomic. Ben explains the venture capital stage-agnostic approach and his transition from board member to CEO in a polite, informative manner.
Managing Cap Tables and Passive Equity Churn 5424 Nathan digs into cap table management for departing founders and questions whether perpetual licensing leaves money on the table. Ben clarifies how socket and core count pricing works while delivering quick payback periods.
Replacing IT Allocation Guesswork with AI Autonomics 3632 Ben outlines the shift from legacy IT allocation guesswork to autonomic AI workload management. When Nathan mistakenly asks why VMware was dying, Ben swiftly corrects the misunderstanding by clarifying that VMware was the dominant incumbent and the smaller competing startups were the ones that perished.
Business Growth, Scale Metrics, and Series D Dynamics 6446 Nathan presses Ben to disclose absolute revenue numbers and back-of-the-napkin Series D valuations. Ben resists sharing revenue specifics, prompting Nathan to reframe the question around late-stage dilution strategy.
Turbonomic's Green Circle Community and Performance Gains 3201 Ben describes Turbonomic's Green Circle customer community and operational metrics before moving into Nathan's standard rapid-fire closing questions and outro.

Statements from this episode (9)

Disclosure
Bain Capital invested roughly $20 million into Turbonomic
“On behalf of Bain, I think we're in roughly the young twenties.”
Ben Nye Nov 3, 2016 ▶ 3:41
Disclosure
Ben Nye became interim CEO after founder and external CEO clashed
“There were some issues between the founder and the CEO hire. And so that's, that was the time when the board made its decision and asked me to step in on an interim basis, which I agreed to.”
Ben Nye Nov 3, 2016 ▶ 4:45
Disclosure
Turbonomic repurchases equity from departed employees to keep cap table active
“From time to time the company has retired passive shares. And there's typically a thing called an investor rights agreement that governs the way in which that is executed. And indeed we've done that as well, just to keep more equity and more active hands.”
Ben Nye Nov 3, 2016 ▶ 6:35
Assertion Partly supported
194 million enterprise workloads ran across hybrid cloud in 2016
“There's a hundred and ninety four million workloads in 2016 between that which run on prem or premises and that which runs in the public cloud.”
Ben Nye Nov 3, 2016 ▶ 7:29
Assertion Not checkable as stated
91% of Turbonomic customers achieve full payback within three months
“No, I think we're, look, 91% of our customers have a three-month full payback, so by definition, we've, you know, even with the price increases of the last four years we certainly feel that we've offered a huge consumer surplus to our customers.”
Ben Nye Nov 3, 2016 ▶ 9:52
Assertion Not checkable as stated
Every startup Bain evaluated that directly competed with VMware died or sold
“And just to make the case roll the tape forward. And every one of those players that we looked at has either been acquired or gone.”
Ben Nye Nov 3, 2016 ▶ 12:39
Prediction Partly held up
VMware's revenue growth will continue to slow, but it will not die
“They're not going to die. I think their growth rate is going to continue to slow, but I don't think they're going to die. They've got a huge amount of cash that they generate.”
Ben Nye Nov 3, 2016 ▶ 13:01
Assertion Not checkable as stated
Turbonomic reports 1,600 enterprise CIO customers and over 400 employees
“So we're just a hair shy of 1600 CIOs who invested in Turbonomic. Again, real time autonomic control. And the company is over 400 people. We've had 24 consecutive quarters of record revenue, which is pretty exciting. And by the way, the last two based on audit…”
Ben Nye Nov 3, 2016 ▶ 13:16
Opinion
Pure business model companies like Uber lack defensible long-term sustainability
“There are other companies that are pure business model companies. I don't think they have the sustainability and the worry you have there is ankle biters coming up through the ground. Think of, you know, Uber and Lyft as an example, great company, In Uber, but…”
Ben Nye Nov 3, 2016 ▶ 15:46
Made with StarZero

Turn any episode into a week of clips.

This entire site, over 2,600 episodes transcribed, diarized, checked and made playable, runs on the StarZero media pipeline. Drop in your own episode and the podcast clipper finds the moments worth sharing, cuts them, captions them, and reframes them for every feed.

Try the podcast clipper Learn more