How Backblaze CEO Gleb Budman grew Backblaze to $100M revenue with a 164 person team in 2024.

hello good morning uh good to see you all right so uh my co-founders and I actually we did two companies before both of them were Venture funded both of them were acquired we when we started backblaze we said you know what there are some good parts about Venture funding there's some bad parts let's do it uh differently so we started by bootstrapping we put our jobs we took uh we said for one year we're gonna do nothing uh in terms of venture funding there's gonna be no PowerPoints there's gonna be no no spreadsheets there's gonna be no pitches there's a focus on product focus on customers see how it goes um so we uh we did that for 15 years we took the company public uh in 2021 I'm gonna try to share 15 years worth of history in 20 minutes uh or less here um so this is what it started like um probably what a lot of you guys uh started like right Five Guys you know uh one bedroom apartment um the uh the the guys the tall guy standing in the in the in the room there in the blue shirt that's his one bedroom apartment he's living in the uh in the one bedroom that's behind the wall over there um all of us are crowded in the reason I'm wearing uh flip-flops and a t-shirt is because it's hot as hell because there was no AC and it's uh and we didn't have enough power to power the servers and the AC at the same time so this is how it started um and then in 2021 uh we were able to bring uh about a third of the team out to New York out from San Francisco uh to ring the bell on the NASDAQ in Times Square uh really exciting day super fun you know the whole the whole shindig so um you know when we started the company we said um hey you know what are we going to do we're gonna run this forever as a private company are we going to uh raise funding are we going to sell the company like we did the last two are we gonna take it public and taking it public was one of the possibilities but it was a little bit like trying on uh you know your your dad's pants when you're a kid you know sure yeah yeah maybe someday will fit into these right um it was uh you know it was still kind of a fiction right um and so uh I'm gonna share what kind of some of the learnings both in terms of um what it took to go public um as well as why bootstrapping is actually a good way to get to be able to go public but one of the I think the um the things I want you know you to walk away with is it's possible to go public right and I think for for um you know at different stages it doesn't feel that possible right um okay so um you know we're gonna talk about how you decide how do you prepare how do you actually execute on that process uh this is our uh path to their revenue-wise and so you know if you look over here let's say you know 2014 we were at about 10 million bucks in in Revenue you know many of you are probably um you know many of you are Beyond this some of you are Beyond this some of you are at the beginning of this some of you in the middle but you know sitting in 2014 with 10 million dollars of Revenue you know kind of going like oh yeah maybe we'll take the company public still seems like a fiction but then you look at it it's only seven years later and you know eight years later and and we're public rights so it you know the thing to walk away with here is you know like at the beginning it's like you know you're just trying to figure it out and you know um I I love the the first Speaker who was talking about you know getting to 50K of mrr like it's awesome um and it you know at that kind of growth rate it's only a number of years before um being public is actually a feasible path um okay so um what do we do we we started off selling computer backup so you know backing up your laptops and desktops seven bucks a month totally unlimited we do that for individuals we do that for businesses super simple and it takes everything a bunch of uh of our customers started coming to us and say hey I love you for your backup service um but I and I trust you for all my storage stuff but I need all these other storage things um give me access to your platform so um you know listening to customers hearing what they wanted we built um B2 which was our second offering it's cloud storage as a service it's like Amazon S3 service for object storage but it's one-fifth the price point um so if you're using Amazon S3 and you want to save a whole bunch of money make it easier you know come check out B2 um so uh deciding um so uh it's it's I think it's a generally there's this there's a belief that if you're going to go public you have to raise money and you have to raise a ton of money because you have to burn a ton of money because that's the only way to go public um I I want to it's it's a contrarian viewpoint but I think Booth shopping is actually many ways a better way to get to be a public company um here's some of the ways that I think it helped us um when we started the company we were going to use Amazon S3 as the underlying way that the in for the infrastructure for our backup service that's what we wanted to do we did the math we said oh we're going to lose money on every customer that didn't seem like a good way to build a business if we had to raise the whole bunch of venture funding we probably would have done it and said we'll figure it out later somehow we'll figure out how to how to make it the math work but we didn't have any money so we have to start from first principles and figure out how to actually make the business work we ended up designing a platform that was uh like drastically less expensive than Amazon which we probably would have never done if we had 10 million bucks to cash in the bank on the first day um it also just continued making us efficient throughout the years every single day the culture was built up that you have to focus on the efficiency of building the business that is a fundamental thing that comes with bootstrapping um it also I think drives your go to market approach um for us we couldn't spend money on ads we didn't have any money so we built a really efficient go to market which was self-service and Pog based and um we started writing a Blog that was focused on storage um and had about three million people a year that started reading it that drove a lot of people to come and check out the the the the company um didn't really cost a lot of money because we didn't have a lot of money so I think bootstrapping has lots of advantages that actually help you build a business and especially in today's environment where uh companies care about profitability and a bit of margins and cash flow in in the public markets um it's a it's a value and it's hard to build that value after you've been after you've raised tons of money for years and years and years to change the culture to do that um so you know and this is kind of the last one which is like that whole culture of establishing of a bootstrap is part of that okay so those are some of the advantages I think of building bootstrapped as a path to going public now um on the on the comment of the when do you actually go so what all the company you know experts that we spoke with said was uh you've got to wait until at minimum minimum your 100 million in revenue and will you should be at 300 million because that's the size companies that go public and they're right that's the average size of company that goes publicly you know why because the banks make more money that way um but when when we went public this was the chart that we went out on the Roadshow with um a few different numbers on there but focus on the one that says 65 million of ARR it was not 300. um we still went public um it's uh you can take the company's public at smaller scales then the banks are leaning into taking companies public because they make a fee on on the amount that you raise okay so um what about in terms of costs um so it it is expensive to go public so you know we talk about um you know backlights cloud storage really easy really inexpensive going IPO not easy not not inexpensive but um it is possible um and uh so it cost us you know 10 to 15 million dollars to take the company public kind of a big number most of that went to the banks because they take seven percent of what you raise but there are lots of other places where um you actually have to spend money lawyers accountants uh you know directorate office insurance is a whole bunch of stuff um so it's expensive but if you're raising 100 million and you give away 10 million you know it's a little bit of the cost of doing business um okay uh when do you do it so um part of the the thing is that when you're actually going public you it's it's when you're uh uh the you're going to be talking to investors about if you give us money we're going to do the following things with it so you need to have metrics and a story around um this is the right time for you to change that trajectory for us...