YC
Diane Greene at Startup School 2013
@ Y Combinator
10/26/13
Takeaways
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Diane Greene
10/26/13
@ Y Combinator
It's special to be back in this auditorium where I attended an all-hands meeting as a software engineer at Tandem Computers in 1989.
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Diane Greene
10/26/13
@ Y Combinator
I co-founded VMware in 1998, creating the virtualization industry, which allows multiple operating systems to run on a single computer or across computers.
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Diane Greene
10/26/13
@ Y Combinator
At VMware, we aimed for our virtualization technology to be ubiquitous by the year 2000, and although we missed that target by six years, we eventually achieved it.
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Diane Greene
10/26/13
@ Y Combinator
We self-funded VMware initially, allowing only immediate family to invest, and later sought angel investors who were technically sophisticated and understood our vision.
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Diane Greene
10/26/13
@ Y Combinator
Once we entered the market, we decided to raise more funds through a real outside round, seeking strategic partners to invest in our desktop product. We decided to keep our valuation stable during the funding round, despite offers from venture capitalists to increase it, because we wanted to go public without risking a down round.
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Diane Greene
10/26/13
@ Y Combinator
Michael Dell, our lead investor, expressed skepticism about the profitability of Linux companies, stating he just wanted to support Linux, which was disheartening for us as entrepreneurs.
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Diane Greene
10/26/13
@ Y Combinator
We aimed to create a desktop product that would allow users to run Windows on Linux and vice versa, without requiring any changes from operating system or chipset vendors.
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Diane Greene
10/26/13
@ Y Combinator
To launch our product, we positioned it as a Linux tool, allowing users to run Microsoft Office applications in a Linux environment without needing multiple computers or dual booting.
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Diane Greene
10/26/13
@ Y Combinator
We decided to offer our product as a fully functional free beta for 30 days, with a commercial price of $299 for companies and $99 for hobbyists, trusting users to pay based on their usage.
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Diane Greene
10/26/13
@ Y Combinator
We launched our product at a startup demo conference, despite initial skepticism from others about our idea, and faced challenges in recruiting a PR firm due to the prevailing negative sentiment. We decided to handle marketing ourselves instead of hiring a marketing person, and we had a memorable audition experience with two computers, one as a backup.
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Diane Greene
10/26/13
@ Y Combinator
During our demo, we experienced a technical glitch that led to a standing ovation when we cleverly switched to a new window after a virtual machine crash.
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Diane Greene
10/26/13
@ Y Combinator
We chose not to spend money on marketing but focused on public relations, which resulted in significant media coverage, including an article in the Wall Street Journal.
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Diane Greene
10/26/13
@ Y Combinator
When we launched our beta, we underestimated the demand and ran out of bandwidth, leading a Cornell student to host our site temporarily while we resolved the issue.
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Diane Greene
10/26/13
@ Y Combinator
From day one, we filed patents to protect our intellectual property, especially while competing against giants like Microsoft and Intel, although the patents didn't provide much help in the long run.
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Diane Greene
10/26/13
@ Y Combinator
I sought out Larry Sancini to join our board because of his expertise in navigating complex negotiations, which proved invaluable for our startup.
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Diane Greene
10/26/13
@ Y Combinator
We launched our product online, supported it via email, and maintained a frugal, cash-neutral operation while reaching an international market from the start.
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Diane Greene
10/26/13
@ Y Combinator
Entering the Enterprise market can be daunting, but it's a necessary step for growth and innovation. An engineer left the company, stating that we wouldn't succeed in the enterprise market and that the company was going to fail.
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Diane Greene
10/26/13
@ Y Combinator
A well-known tech banker mocked us, saying we couldn't succeed in the enterprise market without building credibility and playing the right political games.
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Diane Greene
10/26/13
@ Y Combinator
We decided to go to market with hardware vendors instead of building an enterprise sales force, finding ways to help them profit.
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Diane Greene
10/26/13
@ Y Combinator
IBM, which invented virtualization in the 1960s, had x86 servers that were struggling to sell due to a lack of demand for large workloads.
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Diane Greene
10/26/13
@ Y Combinator
We engaged with hardware vendors like IBM and HP, trying to convince them to partner with us, despite initial resistance.
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Diane Greene
10/26/13
@ Y Combinator
After a long struggle, we finally secured a meeting with Forrester, only to find the analyst covering the auto industry instead of our field.
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Diane Greene
10/26/13
@ Y Combinator
An IBM representative approached us about our desktop product, suggesting it could enhance their server sales, leading to a partnership.
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Diane Greene
10/26/13
@ Y Combinator
We created the VMware Preferred Hardware Vendor program, which helped us gain traction in the market as other vendors signed up to meet our requirements.
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Diane Greene
10/26/13
@ Y Combinator
Our partnership with IBM allowed us to present at their worldwide conference, significantly boosting our server market presence.
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Diane Greene
10/26/13
@ Y Combinator
I was approached by someone who thanked me for VMware, highlighting the importance of bringing a product to market that people love.
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Diane Greene
10/26/13
@ Y Combinator
Each startup is unique and challenging, and I wish good luck to everyone pursuing their own ventures.