Turns out you don't always need a product to raise capital. But you do need a reputation.
That's what won Mark Imbriaco
(pictured left) and Kevin Smith
(right) of Operable
a $2.7 million investment led by the Silicon Valley firm that funded Fitbit, Puppet Labs, MakerBot, Wordpress and Raleigh-based Valencell, seed stage investor True Ventures
. The money will help the Durham-based men and a team of developers located around the nation build software and workflow they hope will transform the way IT issues are reported by users and logged and resolved by developers. It's a multi-billion dollar problem faced by nearly every company that conducts business online.
And according to True Ventures partner Puneet Agarwal of Palo Alto, there's no better team in the world to solve it.
Imbriaco, he says, is "truly special," a DevOps domain expert with systems architects and engineers around the world studying his work. When Agarwal polled other founders in the True portfolio, many considered Imbriaco the de facto leader in the field of DevOps. True delivered a term sheet within five days of an initial meeting. Here's a True blog post welcoming the Operable team.
"We don't just want founders, but founders of movements, people like Matt Mullenweg of Wordpress, Bre Pettis of MakerBot, Luke Kanies of Puppet Labs," Agarwal told me. "They not only create products but they have followings around what they're doing."
Imbriaco believes that will be true, but he's not the type to celebrate raising money. "We haven't done anything yet except prove that we know how to get funding," he says.
The foundation for Operable
But that's not for long. When the money hit the bank late in February, Imbriaco hurriedly hired a team of developers he and Smith had worked with previously. One is located in the Triangle and four others in Atlanta. True's funding offers a couple years of runway, but Imbriaco's hope is to have an MVP within six months.
His team's mission will be to help the people troubleshooting problems with a network or server or website or app get the information they need to respond and remember the steps they took to fix the problems, and then use that information to improve the software to prevent future problems.
The process they'll improve is one that sends alerts to people, often in the middle of the night, when things go awry with technology. There's no context for the problem provided and no record of how it's solved.
"Our vision is to give people some tools to collaborate around resolving problems, so others can see what you saw and remember what you did as you solved it," Imbriaco says. "And after the fire is out, tools to look back so you can take the feedback into development."
Imbriaco's experience comes from his work in systems administration or operations management roles at some of the biggest names in technology. His job is typically to ensure the infrastructure of a website or web platform—the network design and architecture and datacenter network—is powerful enough not to shut down.
His technology career began when he dropped out of Old Dominion University in Virginia to start a company in 1994—his only other time, before Operable, as a founder. The startup didn't work out, but he moved on to systems administration, architecture and software engineering jobs at Bank of America, AOL and then a startup called Decisiv. And that got him to the modern names in tech. He was operations manager—employee number 7—at 37signals (now Basecamp) and then director of cloud operations at Heroku when it was acquired by Salesforce.com.
He stayed at Salesforce as senior director of technical operations for a year, overseeing the platform's growth from 60,000 applications to 1.5 million, before signing on with LivingSocial
as vice president of technical operations. He left there in less than a year, realizing that he needed to feel passionate about the company he worked for. He just didn't care much for daily deals.
was a much better fit—a deep passion for Imbriaco is enabling developers to create software that eats the world. He was friends with the GitHub cofounders when they started, and they finally had the money in 2013 to bring him aboard as head of technical operations. Imbriaco focused on strategic issues around infrastructure—datacenter procurement and architecture and network design. He only left in 2014 when the company began requiring its managers live in San Francisco.
Despite his work at high-profile Silicon Valley and Washington D.C. companies over the prior seven years, Imbriaco had performed his job and managed teams from his home in Wake Forest, where he lives with his wife and four kids. He had no interest in moving.
When and how to start-up
quickly snapped him up—a cloud hosting platform, it operates like Amazon Web Services and Google Cloud but is focused on simplicity of use for developers. Imbriaco's role was to keep the entire platform and nine supporting datacenters around the world online.
But by the end of 2014, he'd begun to get serious about an idea stirring in his mind. He shared it with his friend Kevin Smith, who spent time as a software engineer or director of engineering at Red Hat, lulu.com, OpsCode/Chef and most recently, Houston-based Alert Logic. They decided to quit their jobs at the end of 2014, and take a chance on what would become Operable.
Soon after, Imbriaco met with an East Coast venture capital firm to get connections to advisors in the field. He didn't want to raise $250,000 but a sizable round that would let him hire the best people at the get go, build a great product and get some good traction.
That meant immediately looking for funding outside the Triangle, a region notoriously tough for raising larger rounds of funding. Advisors very quickly connected him with eight venture capital firms in California (including True), most of which asked him to pitch.
Agarwal was in the meeting with True, and got the vision for Operable just three slides into a pitch deck. He'd invested in other DevOps companies and saw incident response "as a wide-open space" becoming more critical the more apps are developed and depended upon.
"How an ops person responds to situations where apps aren't working well is a continually hard problem," Agarwal says. "I think there is an entire system and workflow that needs to be built that doesn't exist today."
Though Operable also received a term sheet from another firm, the founders went with True (as well as several angel investors). Imbriaco liked that the firm keeps the founders in the companies in which it invests, and has founder-friendly terms around liquidation preferences and how they'd participate in an exit. He also reached out to other founders in the True portfolio, and all gave good feedback.
"We liked that they were focused on being in at the very early stage and staying in at every stage throughout our life," Imbriaco says.
What a True Ventures investment really means
That's part of the secret sauce of True, Agarwal says. It closed a $290 million fourth fund
last July, beating a fundraising goal of $250 million and giving it the wherewithal to make follow-on investments in portfolio companies. The firm typically remains the largest outside shareholder until exit.
It also promises help with operational challenges—the partners have started 14 companies combined and they offer access to a community of more than 200 founder-CEOs, which Agarwal says is talking every day and "very giving".
"For someone like Mark to plug into a community like that is extremely valuable," he says. "I can almost guarantee any question he has is going to get answered either through True itself or the broader community."
The firm also hosts regular True University workshops at Stanford and an annual Founder Camp
Another benefit—True likes that Imbriaco is based in the Research Triangle and will also have a team throughout the U.S. True has had success with companies in other smaller hubs of technical talent, like Portland, Ore. and Ann Arbor, Mich.
"It's hard to hire engineering talent in the Bay Area, and Mark has been very successful throughout his career at building distributed teams," Agarwal says.
That won't preclude talented engineers or executives in the Triangle, Imbriaco says. If they're talented and interested in working with Operable, he'll hire them.
I ended my interview with Imbriaco by asking for advice he'd share with people starting up and raising capital, based on his very unconventional fundraising experience (at least for a Triangle startup).
He offered these three tips:
"If you think that if you don't do a startup in your 20s, you won't have the chance to do it later, that is obviously wrong. We were worried we'd have problems because we were older, but they thought we de-risked it for them with a track record and experience."
"Engaging and networking pays tremendous dividends, not just going to work and doing your job and going home—you have to put in the extra effort and build a support network even if you don't decide to found a startup. It gives you so many advantages."
And finally, "get some experience that helps to prove to investors that you have some clue what you're doing and build up your nest egg for awhile so you have the resources to survive."