How DataStax CEO Chet Kapoor grew DataStax to $246.9M revenue and 500 customers in 2024.

hello everyone my guest today is Billy Bosworth he is responsible for strategy growth and day-to-day operations at data stacks he's got 20 years of experience in the database industry in roles ranging from db8 a senior executive before data stacks he spent in six years at Quest Software which many of you are familiar with under his leadership the industry-leading quest database business grew from supporting traditional relational databases to a portfolio that now includes tools for the cloud and many other scenarios and situations prior to quest Billy led product teams from Embarcadero technologies database productivity solutions and he served as the director of tableau software he holds a Bachelor of Science in computer science from the University of Louisville Billy are you ready I take it to the top I am thank you for that great introduction am I am I hired you're on all right I'd be fired in about two seconds I'm a horrible employee we talked earlier so you go from football coach to databases to now data stacks you raise over 190 million bucks take me to the story the company was launched you were not a founder you said you joined when they were 20 walk me through that story and then let's hear about data stacks and what you do yeah at Quest Software where I ran the database business we could see that the trend of the relational model was was starting to flatten and we saw this new class of databases start to emerge many of them were around this open source technology ours was founded in a technology called Apache Cassandra I partnered with the company when they had just formed and I got to know him over the next 10 months at which point they asked me to join as CEO so I knew these guys from the day they started the company and then I joined the company our customers with that quests a partner so we were doing was we were a ecosystem player so what we would do is look for the new technologies that we would build tools to them support ok now I mean dive into that I mean how they asked you was it was an email what was the subject liner was a phone call I mean how'd that work they were in Austin and I was living in Dallas and so it was a nice easy drive down there and got to know them and the team and as we started talking about how we might be able to help them with tooling and such it just naturally led to conversations about the market and where are you guys going and how are you developing and a technical founder and semi technical founder who was doing the CEO work and it was the mat file who was the semi technical founder who came and said you know I think I could learn all this stuff but I'm not sure I should learn it as fast as I could which would be best for the company and so I think you would be a great fit if you were interested and the rest is history were they seducing you or were you secretly seducing them I think it was a mutual love affair we meet each other it was we really liked each other from the start and I tell you for a founder to give up the CEO title is a nontrivial of a net that is a very very mature move but by Matt and Matt stayed with the company for like another six years you know he was with us for a long time just moved on last what year what year by the way was this would have been 2011 when you joined that's correct May of 2011 okay and you know without getting into too much detail here cap table wise how'd they actually structure that I imagine they give you a big chunk they were early they were pre funding right were they pre revenue pre revenue but not pre funding so they had just raised the series a I came in my first assignment was actually to go raise the series B which was tough because we were still coming out of the nuclear winter and it was in 2011 still not a great fundraising environment so we put significant effort into raising the series B and then the subsequent rounds got easier after that yep and then total J you've raised about a hundred ninety million is it accurate that's right through Series II as a MEC oh yeah those five rounds of funding we've raised almost 200 million okay we'll jump warned it on a second but I want to take a step back tell us about the product what does data stocks do and what's the business model is that pure play SAS or is it pay-as-you-go based off you usage yeah so data stacks is a leader in data management for cloud applications which we'll talk about have a whole different kind of scale and and set of requirements for the database the way we make money is we sell our flagship product data stacks enterprise on an annual subscription basis and you can consume that either as a service where we have a men's service that will do for you or you can consume it where you manage it and you made to run it in the cloud or you may decide to run it on Prem but we have about 60 to 70% of our work clothes are already being run in the cloud either with us managing it or our customers managing it and generally the ACV on these on average are what I mean are we talking about 10 grand a hundred grand a million 10 million posted on a grand we service enterprises and we stay very focused on enterprise class problems and enterprise class customers that's fair walk me through the story in terms of a customer acquisition so many if my business listeners are going I always find it difficult to sell to the CTO CTOs listening are going are saying oh it's so easy because we we speak the same language who are you selling to an organization's and what's your acquisition strategy that's actually a fabulous question because it's a it's a little bit of a surprise to a lot of people but many of our entry points inside of organizations do not start with the centralized technology teams they actually start with a line of business and the lines of business are the ones who are tasked with moving very fast to either gain market share or stop the erosion of market share they have to move quickly and so often they will come directly to us and then eventually after 2 or 3 projects we make our way into the centralized team interesting interesting so it's a land and expand approach okay so how does that first person inside one of these lines these teams that representing these lines how do they find you our primary persona with whom we engage is a role called a data architect and this is the person who is responsible for fitting together the entire data strategy of a set of applications or a given application and that person generally knows right now I think that among silver minded people in the industry there's a very good agreement that Cassandra which is our core technology is the de-facto scalable industrial-grade performance data base and so they kind of know that to begin with and then because we are the company who essentially bill Cassandra if you look at the amount of contributions we gave to open source and all the marketing we did then it's a very natural path to us what are you paying to acquire these data architects as a customer with your CAC on average would you say we don't reveal CAC in that manner but I can tell you that it's a combination of a couple things so one is the open source trail which by the way you you can't really draw a direct monetary line too because the whole point of open source is a lot of times it's all about come and get things without having a direct connection you know so in other words you don't want to be pestered Nathan you want to be an open source person you want to be anonymous you want to go grab the open source code and then you find us through many things that we do on our training like data stacks as a site called data stacks Academy which provides free world-class training many people find us through that as an example so you can't really measure the CAC directly in that way but we also have a direct sales force who also goes after direct enterprise accounts as well so it's combination of the two tell me about the Salesforce what's your total team size today and how many are on the sales team we have in the company north of 450 people about half of those roughly are in product and engineering and about half of those are in the sales and marketing organization we blend those two together and then you know some remainder 10% or so is in the GNA team so that's our that's our general breakdown we we have pretty standard model of enterprise sales manager with teamed up with a SC teamed up after the fact we the customer success team so there's a there's a whole value team along that whole customer journey when I speak with CEOs that have done more or they doing you know more than a hundred million in ARR they typically talk about metrics a little differently than somebody at the 50 million or even five million range when you look at what you liked optimize your payback period for that's maybe a better question than CAC how quickly do you like to keep your money velocity like coming back to you yeah so it's all about how fast we can get those first projects to success to give you an idea of our size by the way we're a revenues exceed 100 million in ARR we have over seventy five percent gross margins so we're very much a software company we have a very very clear and close line of sight to cashflow positive so our cash is kind of our control what is that what does that mean can you quantify that way mean in your control or close to it it means that we have no need to raise...