How BigPanda Raised Almost $35M and Serves 20+ Fortune 500 Customers with Its AI-Driven IT Operations Platform (Interview with Co-founder and CEO Assaf Resnick)

Host Intro and Company Overview

Nathan Latka

00:00Founded back in 2012 in Tel Aviv now with offices in Palo Alto and Tel Aviv 60 folks full time about half and half between product and engineering, and then market and sales. They've raised $35,000,000 have you know, 20 of the fortune 500 as customers, but less than 500 total. So between twenty and five hundred customers, average kind of contract value, you know, really hitting that million dollar mark as they help try and help these IT guys

00:27in these war rooms, understand which alerts are important and which ones are simply noise. This is episode seven zero eight. Coming up tomorrow morning, you'll learn from Blake Smith, who breaks down how he's got 17,000 people using his app to efficiently manage their wardrobe. But first, here's today's episode. This is the top where I interview entrepreneurs who are number one or number two in their industry in terms of revenue or customer base. You'll learn how much

00:57revenue they're making, what their marketing funnel looks like, and how many customers they have.

Assaf Resnick

01:03>> I'm now at $20,000 per top.

Nathan Latka

01:055 and 6,000,000.

Assaf Resnick

01:06>> He is hell bent on global domination. We just broke our 100,000 unit soul mark.

Assaf Introduced to the Show

Nathan Latka

01:11And I'm your host, Nathan Latka. Hello, everybody. My guest today is Assaf Resnick. He's the founder and CEO of BigPanda, an algorithmic IT operations platform that turns IT alert noise into insight unifies fragmented operations and enables digital enterprises to attain dramatically higher service levels. Prior to founding the company, he was an investor with Sequoia Capital, where he focused on early stage companies across enterprise software, SaaS, and the Internet sectors. Assaf, are you ready to take

01:43us to the top?

Assaf Resnick

01:44>> I am. I am. Thanks for having me.

Why Assaf Left Sequoia to Found BigPanda

Nathan Latka

01:46Sequoia sounds like a sweet gig. Why do you jump out of that and launch BigPanda?

Assaf Resnick

01:50>> Oh, that's a good question. Sometimes I still ask myself that. And the hardest day is I ask myself, why did I leave this golden cage? You know, I spent six years at Sequoia, and it was an opportunity of a lifetime. I had the privilege to work with some incredibly talented entrepreneurs and incredibly talented partners, but I was young. I felt at the time, boy, I started there at age 29.

02:22>> And I learned a ton. It was one of those pivotal moments in my career that a fork in the road and you look back and this was definitely one of those forks in the road. But after a few years, A, I got the entrepreneur bug. And I'd been around a lot of entrepreneurs and seeing them through the good times and the bad times. And I wanted to get a sense for that myself. And I also had

02:45>> a sense that having not started a company before, I was telling people how to drive a car, but I'd never driven a car myself. And so I really wanted to kind of eat my own dog food. And and that was a lot of the impetus to leave.

Life as a Principal at Sequoia

Nathan Latka

03:01Mean, did you you miss out on any deals at Sequoia? Because the entrepreneur was like, listen, I got a term sheet from the guy at Bessemer, and he's built his own company before. So sorry, Assaf, I gotta go with him.

Assaf Resnick

03:11>> I wasn't a partner, I was kind of

03:15>> a principal there. So helping a lot of deals at the time. So I personally didn't have a lot of that. And, you know, Sequoia is a tough place to turn down. But so it really wasn't from a perspective of winning deals, it was more from perspective of personal career growth.

Nathan Latka

03:32And how does so just people that aren't familiar with how VC works, you have kind of analysts and then principals and then managing directors. Is that kind of how was it Sequoia?

Assaf Resnick

03:41>> Every firm is different. Sequoia is pretty flat. But you know, different firms have the kind of very regimented, you're an analyst, and then you're an associate, every firm is a little different.

Nathan Latka

03:50And so how is Sequoia?

Assaf Resnick

03:54>> Pretty flat. It's a pretty flat organization where the partners do the majority of their own kind of sourcing and deal flow and due diligence.

Nathan Latka

04:04And so are you in your role as a principal, would you get piqued interest in a certain sector and go research the heck out of that sector, then kind of pick a champion to go after? Or did you just bet on people you brought people related deals to the other partners.

Assaf Resnick

04:21>> Sure. I mean, don't wanna talk too much about kind of Sequoia's

Nathan Latka

04:25To you specifically.

Assaf Resnick

04:27>> Because a lot of this is proprietary. It's a combination. For me personally, it's a combination of both. So you definitely want to be armed with thesis I guess theses, I don't know, what's the plural thesis about

04:44>> where you think there's opportunities across the market, where you think there's vacuums that are ripe to be filled. But on the other hand, you're not the one that's creating

04:55>> companies. You also have to it's a combination of I have thesis of where there's opportunities in the market coupled with where they're aspiring entrepreneurs that are doing amazing things and do I want to partner with them. So it's a little bit of both.

A Sequoia Deal That Comes to Mind: Snaptu

Nathan Latka

05:09We're gonna jump into BigPanda here in a second, which is your current venture, which seems like it's on a terrible dive into it. But first last question about Sequoia, which which deal or entrepreneur were you most proud of discovering or bringing to Sequoia?

Assaf Resnick

05:23>> That's kind of like asking which of Yeah, the

05:27>> I'll pass on that. A of good ones that that I'm very proud to have been part of and some still very, very good friends and and colleagues. So if any

Nathan Latka

05:38of them are listening, he's giving all of you congrats. But just name one that that was really interesting for you. Right? They just... You didn't expect that it did well?

Assaf Resnick

05:47>> Well, I wouldn't say I didn't expect that it did well. I'd say probably one that just comes to mind, but I don't know if it's necessarily the one one of my favorites. We invested out of Israel in a company called Snaptu, which did a very interesting company that did...

06:07>> Back in the day when not everyone and their mother had a smartphone, particularly in developing nations was able to do a lot of porting of mobile applications to what was called

06:20>> feature phones at the time. So imagine folks in developing countries that don't necessarily have four gs connections and fancy touch screen phones. And they want to be able to use apps like Facebook and Snaptu and Twitter and LinkedIn as well. And it's just a really, really good job of bringing kind of modern mobile connectivity and apps to the developing world. Were bought by Facebook and now are really part of the charge of leading what Facebook

06:48>> is doing around bringing that kind of mobile connectivity to the developing world.

Nathan Latka

06:53Snaptu, there you have it, guys. Let's jump into BigPanda. Walk us through what the company does.

What BigPanda Does: IT Alert Automation

Assaf Resnick

06:59>> So essentially, what we do at a very high level is automate the ability of human beings and IT operations to keep up with the data center that's radically evolved. So think of the folks in IT operations. So the world spends over a trillion dollars a year in IT operations. And in very, very broad buckets, you can think of that in three very, very big buckets. Folks who build and scale software, folks who build and scale infrastructure,

07:33>> and then folks in what's called service operations that actually have to keep all that software and all that infrastructure running. Those can be called network operations engineers, what's called the NOC. They can be called DevOps engineers. They can be called site reliability engineers. A very, very big chunk of all that IT spend is towards engineers that actually have to keep the lights on. And if you think of what's been happening in the data center around, hey,

08:00>> I've got to keep this software and this infrastructure running, but that software and that infrastructure has radically transformed over the last fifteen years. So think of if I'm a large enterprise twenty years ago, I was buying the majority of my stuff from a handful of large vendors. I was buying it from IBM and from Oracle and from BMC and CA and maybe HP. And that gave me the lion's share of my systems, my monitoring tools, up

08:34>> and down my stack.

08:37>> And so from the perspective of the folks actually have to keep the lights on, you had just a handful of tools, you had data centers that were comprised of several 100 to several thousand servers in your basement and things moved really, really slowly. And so can keep track.

Customer Story: Fortune 50 Networking Company

Nathan Latka

08:55Let me ask this a different way. Can you tell a story about a custom... You... Obviously, I'm sure you have NDAs on some of your customers. Was there a specific customer you can name and actually tell me how they're using BigPanda?

Assaf Resnick

09:08>> Sure. Let me talk about...

09:13>> Let me not name, a a fortune 50 company who's a customer of ours, a very large networking company,

09:21>> came to us and said, hey, twenty years ago, all we sold was network machines and routers and switches and so forth. But today, we're a services company and we've got lots of SaaS offerings to lots of different companies And we have to make sure that those, SaaS offerings, give a... Give the kind of SLAs that we've promised to our companies.

Nathan Latka

09:43SLA, guys, is a service level agreement.

Assaf Resnick

09:45>> Service level agreement. So if I promise some large multinational bank that I'm gonna have nine... I'm gonna be up and available 99.999% of the time, well, I better be... I better do that. And to actually keep that stuff running, I have to keep track of the same company has to keep track of hundreds of applications that are running on tens of thousands of servers and VMs, virtual machines in 24 different global clouds. I've got teams of

10:15>> engineers in The Ukraine and in San Jose, California and in India, and they're using 15 different monitoring tools to figure out what the heck's going on. Imagine you're the poor schmo that's sitting in kind of this war room coming to work with 15 different monitoring tools, and you've got 70,000 different events that you have to keep track of. And you have to understand, hey, within those 70,000 different data points about the health of every nook and

10:45>> cranny of my IT stack is a potential problem. That means my big customer who's got serious SLAs is not getting the quality of service that they expect. That's a really big problem. And the amount of stuff that those engineers have to look at has become a big data issue.

Reactionary vs Preventative: How BigPanda Works

Nathan Latka

11:06So to stop it, are you are you only kind of when incidents start happening on a specific node or a specific database or certain occurrences, you kind of help these folks in the war room quickly figure out if this is something that's correlated, like an attack? Or if it's not related, it's just regular kind of system performance. Like, how are... Is it reactionary or or preventative?

Assaf Resnick

11:27>> It's both. It's it's very much both. So right now, the way it is is imagine you're you're you're in that war room. You've got seventy seventy thousand different alerts and 1% of those alerts are really important and the other 99% are just noise. Go filter through that at any reasonable time. So what we do is we use a lot of machine learning and dynamic clustering to say, hey, mister or missus IT operations, you don't really have

11:51>> 70,000 alerts. You have just a handful of core issues with lots of symptoms, but you don't have to be a data scientist to figure that out. We make

What a Noise Alert Looks Like

Nathan Latka

12:01Tell me what a noise alert would sound like. So what would it actually say? That's something that's not important, but still takes up an IT person's time because it hits their inbox.

Assaf Resnick

12:08>> Great question. Okay. So

12:12>> I've got an alert that says that server number 13 has

12:19>> used up the majority of its memory or it's got low disk IO or something that's a problem. Now, is that a problem? Well, it's a problem if lots of other servers in that cluster are also experiencing problem. And then it's only a problem if that cluster services some kind of critical application. And then it's really only a problem if a customer is having it it... Who's... Who relies on that application is having a crappy user experience.

12:49>> And to piece together all those problems, I've got to look at 15 different monitoring tools and spend an hour or a day connecting the dots just to figure out is this problem with my server something that I should be concerned about? Or can I move on to something more pressing?

Why the If-Then Rules Have to Be Dynamic

Nathan Latka

13:04So I'm oversimplifying here drastically, but you're basically a very much sexier version of like kind of if then statements coming through alerts. In other words, if there are 10 servers in this whatever stack and nine of them are almost full and the tenth is giving me alert that it's almost full. Know if that last one gets filled up, it becomes a big issue because it's a critical part of our application and then that part goes down.

13:26It's kind of if this, if this, if this, and then that's how you decide what alerts the surface. Is that accurate?

Assaf Resnick

13:31>> It's somewhat accurate. The the only thing I would add to that is the if then statements themselves are dynamic.

Nathan Latka

13:41Got it.

Assaf Resnick

13:42>> You can't come in there and say, hey, if I had unlimited human resources, they could come in and write 30,000 if then statements and would that be the same thing? No, because those set of if then statements look very different on a Tuesday than they would on a Wednesday.

Nathan Latka

13:59Yep.

Assaf Resnick

13:59>> Because these IT environments are changing so quickly.

Nathan Latka

14:02Yep. We're almost... You're you're educating me here, and and I'm very curious. You know, I just realized we're we're running out of time. Let me ask some kind of fire business related question to yourself. What year did you launch in?

Assaf Resnick

14:13>> We launched in 2012.

Business Model: Annual SaaS Subscription

Nathan Latka

14:15Okay. And and what's your model? Like, how do you make money? Is it pay as you go? Is it SaaS? What?

Assaf Resnick

14:20>> So we're SaaS offering. So we charge by an annual subscription fee depending on how many virtual machines or containers you're using. So basically, how big is the company? How big is your footprint?

Nathan Latka

14:36Yep. And are we talking... I'm making this up. Are we talking $10 per month or $10 per year or a million per year? Give me some kind of range.

Assaf Resnick

14:43>> No, we're talking much more towards the latter

14:48>> end. We cater to very large enterprises. We oftentimes can help save them millions of dollars both in terms of, headcount efficiencies via automation and in terms of improved performance of their offering.

Nathan Latka

15:05Got it. So high high six figures, I imagine you have some contracts that probably break a million bucks easily if you're saving someone $10,000,000 to $20,000,000 bucks. Right?

Assaf Resnick

15:12>> All right.

Nathan Latka

15:12Okay. And and these folks, what's your team size currently?

Assaf Resnick

15:18>> Right now, I think we're about 60 people

Nathan Latka

15:21and how much have you raised?

Assaf Resnick

15:24>> Oh, we have raised to date, oh, but almost $35,000,000

Fundraising Strategy and the $5M Series B Extension

Nathan Latka

15:30explain to me the strategy behind doing kind of initial large close on series a b and then almost a year later adding 5,000,000 on top of that. Strategically, why do you do that? Assuming my research is correct and that's what you did.

Assaf Resnick

15:41>> Sure. It's very tactical. We had originally done a series b. Gosh, when was it? I guess it was back in mid twenty fifteen, I wanna say. And at the time, we were fortunate enough to have multiple term sheets and we ended up taking a Series B with a great partner. Our partners today include Sequoia and Mayfield and Battery. And we were fortunate enough to have multiple term sheets. So at the time, one of the investors came

16:17>> and said, hey, can we add a little bit more money? And at the time, we didn't really need more money. I didn't really want the dilution. The sun was shining in the VC environment. And then towards the end of twenty fifteen,

16:31>> people started downgrading the value of Snapchat and all these other unicorns. People were thinking that winter was rain clouds were forming and people were thinking that winter is coming again in the VC environment. And it turns out later that after a year, it looks like the rain clouds had disappeared by the time we didn't know. So we had an opportunity to bulk up the balance sheet by another $5,000,000 And when I saw rain clouds forming, I

16:59>> said, hey, maybe it makes sense to get a winter coat from a capital perspective just to have a, you know, a healthier balance sheet. And it was a, you know, very pragmatic move.

Nathan Latka

17:09Sometimes when you see this kind of pattern in terms of capital raising, it's either what you just described or others sometimes they'll go try and raise their next round, a C round, and they just won't get evaluation they like. So they'll say, you know what, let's just get a quick bridge here, right to keep growing the company grow evaluation and try fair series C later. Was that line of thinking at all included in getting that $5,000,000

17:30winter coat?

Assaf Resnick

17:32>> No. Because this was very much, you know, it was just a few months after we'd already done the series b. So we had plenty of pipeline.

Nathan Latka

17:40My research is wrong there. I thought that was over. I thought it was over a year later. No. No. Got it. Okay, good. So it was like you had the round open with on the same terms, you just had an open basically an open round and they just maximum close that other others pile on.

Assaf Resnick

17:54>> Very quick.

Nathan Latka

17:55Awesome. Very good. Okay. Let me see here. You guys are all location wise. Are you all based in San Francisco?

Office Locations and Team Split

Assaf Resnick

18:01>> No. So half the company is based in Palo Alto, and then half the company is based in Tel Aviv. So we started the company in Tel Aviv and all of engineering is still out there. So I was living in Israel at the time. This is just a very, very strong pool of engineers out in Israel. And it's not the kind of feeding frenzy of a hiring market that you have here in The United... Especially in the

18:29>> Silicon Valley. So we started there, built just a very strong team of engineers. And when it came time that I felt that, hey, it's time to start engaging the market, I moved out to Silicon Valley to start the headquarters. And so at this point, we have sales and marketing and product out in the Valley and engineering and UX out in out in Israel.

Nathan Latka

18:49And then give us a sense, obviously, the company... Mean, you're progressing nicely launched many years ago over thirty five million bucks raised team about 60. Is that breakdown on 60? What percentage of those folks are engineering versus kind of inside sales and marketing?

Assaf Resnick

19:03>> It's probably about half half. I'd say probably half of the people were engineering and product, and the other half were more go to market oriented.

Sales Playbook and Fortune 500 Customers

Nathan Latka

19:11So you do have a playbook you're actively executing around selling to these IT departments really inside salespeople on a comp structure? Or I mean, right? Is that accurate or no?

Assaf Resnick

19:21>> You have to have a playbook in order to scale. Absolutely.

Nathan Latka

19:24Some people I will tell you, I've talked to a few people that have pretty significant kind of SaaS business that sell into it. And they really actually don't have a playbook because it's all utility driven. When they add X amount of nodes, they know the product is going to drive extra usage. And the upsell is actually very natural. Some people have inside salespeople calling in to drive expansion ARPU. So I was curious what your model was.

Assaf Resnick

19:46>> No, no, we're very disciplined about it, especially since it's our our sales model is not, hey, let's sell you $5,000 and then let's grow every month. We come in and say, hey, let's do a 100 to $1,000,000 land, $100,000 to $1,000,000 land and then a multiyear contract. And those are much more deliberate deals.

Nathan Latka

20:10Yep. And then before we wrap up here, give me a sense of kind of company size. We obviously have a number of employees, but how many businesses would you say are paying you today and give a range if you're not comfortable with a specific number?

Assaf Resnick

20:22>> Yeah, I mean, I'd rather not talk about sales and kind of customer, the number of customers. But we cater to the largest fortune 500 companies in the world. So we have probably at least 20 companies today in the fortune 500 and then a large number of kind of medium sized enterprises as well.

Nathan Latka

20:45Yeah, I mean, you don't need this is not a low ARPU business, you don't need 1000s of customers to really build something special here. So I mean, I'll put a huge range. It's fair to say you have less than 500 customers?

Assaf Resnick

20:55>> Yes.

Nathan Latka

20:56Okay. Perfect. Great. If we

Assaf Resnick

20:57>> had 500 customers

Nathan Latka

20:59If you had 500 customers paying you kind of a million dollar ACVs. Right? Day to night. Exactly. You're taking me out to a steak dinner. That's what's happening. Right? Alright, guys. I talked about this earlier, but I schedule, like, so many meetings that would blow your mind. I mean, all my podcast interviews. Right? Hundreds of entrepreneurs I talk to monthly, I schedule. And you know what? I do it so efficiently. I get them all to agree

21:20to my calendar so all the calls are back

Assaf Resnick

21:22>> to back to back.

Nathan Latka

21:23That means I'm not switching in between tasks all day long. I get them to batch so I can be very efficient. It's so critical. I use a tool called Acuity Scheduling to do this at nathanlatka.com/schedule. It eliminates the back and forth between me and people I'm trying to meet with. It makes it very simple. And most importantly, they help me keep my no show rate very low because they send out reminders, helps you look very professional.

21:49So go to nathanlatka.com/schedule to sign up, and you get a great deal. You know, you guys know this. I hit people hard. I make great deals. And Gavin, the CEO, has given us a great deal. If you sign up like normal people, okay, on their website, you only get a fourteen day free trial. If you use my link, nathanlatka.com/schedule, you get forty five days free. Okay? It's the best. It's free. Go to nathanlatka.com/schedule right now to

Famous Five: Books, Sleep, and Life Advice

Nathan Latka

22:14sign up, and I'll see you there. Alright. Assaf, let's wrap up here with the famous five. Number one, what is your favorite business book? Oh, wow. And...

Assaf Resnick

22:25>> Okay. I wasn't prepared. The Goal, it's about the theory of constraints. Just a really, really wonderful book about nothing to do with high-tech, but really around how to create

22:41>> processes by always focusing on the primary bottleneck or constraint at any one time.

Nathan Latka

22:47Number two, is there a CEO you're following or studying currently?

Assaf Resnick

22:55>> No, there's not

Nathan Latka

22:56a number three, what's your favorite online tool like acuity scheduling?

Assaf Resnick

23:01>> My favorite online tool? Interesting.

23:08>> Probably Quip, which was recently bought by Salesforce.

Nathan Latka

23:11Number four, how many hours of sleep do you get every night?

Assaf Resnick

23:16>> You know, it's that famous saying for entrepreneurs, sleep like a baby at night, I wake up every two hours and cry.

Nathan Latka

23:24On average, what do you get?

Assaf Resnick

23:26>> Probably around five hours.

Nathan Latka

23:29And what's your situation? Married, single, do have kids?

Assaf Resnick

23:32>> I have I'm married with three children. Oh my Lord, how old are they? Five, three and five months. Oh my gosh. You know, entrepreneur, no entrepreneur, I don't sleep at night.

Nathan Latka

23:44Well, hopefully, like five ten years, they move from a liability into an asset because you can employ them for very cheap and they help build your business. Right? That's how it works.

Assaf Resnick

23:51>> Five months old is already coding. Mean, taking good coders here.

Nathan Latka

23:55So that's amazing. Alright, and how old are you?

Assaf Resnick

23:58>> Oh, me. I'm old. I'm 41.

Nathan Latka

24:00Okay. Last question. Take us back twenty one years. What do you wish your 20 year old self knew?

Assaf Resnick

24:07>> Wow. These deep philosophical questions. What do I wish?

24:14>> You know, I really have no regrets. I took... Know, out of college, I worked, but I took a year off of life, traveled in Central America and in India for for a year.

Nathan Latka

24:27Not something you regret, though, just wisdom you've gained. Is there a nugget you would give back to your 20 year old self to speed up that learning curve?

Assaf Resnick

24:40>> You know?

24:43>> Not off the top of my head.

Nathan Latka

24:45What do your kids? What do you tell your oldest your eldest kid when it comes to just life in general?

Assaf Resnick

24:51>> Don't eat so much dessert and brush your teeth. She's five years old.

24:58>> Don't know. It's a good question. Probably in retrospect, I'd say maybe,

25:09>> I'll say this, I think in my 30s,

25:17>> I was an employee throughout my 30s. And only later into life as I joined Sequoia and started my own company did I really start thinking as an entrepreneur. And one of the things that being an entrepreneur forces you to do is take off the blinders. Because at the end of the day, everything comes down to your judgment call and you have to be able to make judgments very quickly with imperfect information. And that's a muscle memory

25:42>> that you have to be able to learn. And as an employee, you oftentimes, you're not forced to make those very quick judgment calls around a broad number of things and a broad number of broad range of different kinds of people. I want to say probably start a company soon.

Nathan Latka

25:58There you guys have it from the founder of BigPanda. So if he would have he would have started thinking earlier as an entrepreneur started a company earlier again, the company doing well founded back in 2012. In Tel Aviv now with offices in Palo Alto and Tel Aviv 60 folks full time about half and half between product and engineering, and then market and sales. They've raised $35,000,000 have, you know, 20 of the fortune 500 as customers, but

26:24less than 500 total. So between twenty and five hundred customers, average kind of contract value, you know, really hitting that million dollar mark as they help try and and help these IT guys in these war rooms understand which alerts are important and which ones are simply noise. Assaf, thank you for taking us to the top.

Assaf Resnick

26:43>> Alright. Thank you, Nathan.

Nathan Latka

26:44If you enjoyed Assaf today, go back and listen to yesterday's episode with Manny. The government has given him power to let nonaccredited investors invest. It's the first time this has happened.