Last month, I sat down with UpTech Report’s Alexander Ferguson to talk about a range of topics. If you missed part one of our conversation about the complexities of cloud environments and how my team and I founded Glasnostic to bring control to those complexities, you can read or watch it here. In the second part of our conversation, I talked to Alex about my background and what I’ve learned in my experience as an entrepreneur. Below is the transcript, edited for clarity.
Alexander Ferguson: Welcome to UpTech Report. This is our “Founders Journey” series. I’m excited today for our guest Tobias Kunze, CEO and co-founder of Glasnostic. Tobias, let’s go back in time and talk about the path that led you to where you are today.
Tobias Kunze: Well, that’s going to be an interesting story because my background is actually in music, classical music. I started my career as a composer and then got sucked into digital sound synthesis, which, back in the day, used to involve quite a bit of programming. That’s how I ended up in software. What’s interesting here is that, while most people would see this as a U-turn, it has always felt like a straight progression to me. After all, writing music, especially for orchestra, and software engineering are very similar.
My first gig as a software engineer was doing audio work at Silicon Graphics. Very quickly, I then went into startups and, after a few stints, co-founded a company called Makara, which was an enterprise Platform-as-a-Service—kind of a “Heroku behind the firewall.” That company was ultimately acquired by Red Hat, where it became OpenShift.
During that time, I always thought: “Isn’t it odd that we do PaaS, when, as a developer or architect, I want to have maximum flexibility regarding what I can do with my application and not be bound to what the platform provides.” I always felt a mismatch between what a platform does and what the actual needs of the developer are. In fact, I thought that the PaaS to beat was not a PaaS at all but a cloud provider: AWS—which at the time consisted of maybe 500 or so services. So it was evident to me that the best platform for developers was actually just a large number of building blocks—primitives, really—we could use to build whatever we wanted, faster and better.
At the same time, it became clear that nobody wrote these simple web applications anymore. The applications we wrote became ever more complex and, above all, increasingly connected. Applications were no longer islands but began to call into other applications, and other applications called into them. Everything became a dependency of something else, and, as a result, all of these applications became essentially services. And the light bulb that went off in me was that getting these complex service landscapes to work correctly was no longer a matter of merely writing the code. The success of your service landscape depends on how all these components interact. And that was why we founded Glasnostic. To ensure that all parts of a service landscape work together at all times, no matter what happens.
Alexander Ferguson: That is a fascinating journey. When you’re starting a company—when it comes to funding and getting investors and folks on board with the vision, what advice would you share?
Tobias Kunze: I think, ultimately, when looking for funding or, in fact, in sales, you’re looking for these wild moments: you need to get an “Aha!” moment, not from everybody, but from 1 in 100 investors you talk to, who are meaningful for your audience, venture capitalists, or customers. There needs to be a clear opportunity, not just for the investor but for the customer, potential hires, and so forth. It doesn’t matter if 99 investors say “No.” You need one, “Wow, this is amazing!” You never get an investor to almost invest. An investor either already wants to invest in you before you meet, or they won’t invest. It’s black and white.
Investors either already want to invest in you, or they won’t invest. It’s black and white.
Alexander Ferguson: It’s a temperature check. If you’re not getting that excitement when you’re sharing the vision, then there’s something you need to adjust. The next thing beyond getting funding is selling to customers. You’ve done this for both your companies. Have your customers always been enterprise?
Tobias Kunze: Yes. We started doing this four years ago. And definitely, the world was a different place four years ago, not just because of the pandemic, but because of the kind of architectures people were running. We thrive on complexity. If you throw us a customer with just five services, there’s nothing much we can do. But enterprises have massive amounts of complexity. And their complexity is different from Netflix, Google, Twitter, and so forth. At a certain level, these companies have simple applications. Enterprises, on the other hand, have generations of systems and thousands of applications that are interconnected and interdepend on each other in often strange ways. Many of the engineers who wrote these applications are no longer with the company! Many applications are in a state of being modernized, while others desperately need to be modernized. There are integration points that change all the time. And as more things get deployed, more applications are connected to other systems because the business needs to bring data together to create new value. Enterprises run entire landscapes or ecosystems of applications and services. That’s our prime audience.
Alexander Ferguson: Knowing that audience, how do you get in front of the right people? What tactics have you used to get to that “aha” moment?
Tobias Kunze: At the beginning, I think it’s just about being resilient. Like with getting funding, getting one win out of 100 accounts is a great place to start. It’s important not to get discouraged by 99 blank stares. Just talk to people and understand that everybody likes to look for a reason to say no. That’s just human nature. Think about how you go through your inbox every day. It’s “Delete, delete, delete,” right? That’s the mode of operation because otherwise, your day would be over. So, a lot of these “No’s” are circumstantial, and most of these circumstances you have no control over. Certainly, warm intros—getting other people to spend social capital to get other people to talk to you—are great, but they are not scalable. Ultimately, you need to get people to come to you, and that gets easier over time because your customers talk to each other and that social proof gets you into accounts.
Alexander Ferguson: How did you get your first few customers, and who were they?
Tobias Kunze: Like everybody else: through warm intros. And luck. One of our largest customers I just happened to strike up a conversation with over coffee at a conference. That’s how it works.
Alexander Ferguson: What have you learned in building and managing a team that brings about a type of environment that makes your customers want to work with you?
Tobias Kunze: I am a big believer in having the entire engineering team in one room at the startup stage. When you start out, all you can do is try things out and see what works. You need absolute conviction by the team to make forward momentum, and that’s difficult to achieve if everybody is remote. Once you scale, it’s different, but at the beginning, you need combustion, and that means everyone needs to be in the same room.
At the start, you need combustion, and that means everyone needs to be in the same room.
Also, I think the enterprise software market has changed fundamentally in recent years in that you need to build ahead of the market. Of course, the art is not to be too far ahead! Five years ago, you could sell something based on just a slide deck. That does no longer work in the enterprise. Today, you need to have a working product that is already reasonably complete and robust. There is simply too much software in the world!
So, you need to take that risk of being too early as an entrepreneur. You need to start from first principles, form a market hypothesis and build it. And only when you’ve built it to a reasonable degree can you go into the enterprise and get them to adopt your solution. This is opposite to what the Lean Startup movement preached. Even though we are a touchless, bump-in-the-wire solution that is very easy to install, the technology is fundamental enough to always involve a POC and a multi-month process on the buyer’s side. Such a process can’t be done with just a slide deck.
Of course, it always helps to have friendlies that transition from being a design partner to becoming a customer.
Alexander Ferguson: Define how you use the design partners a bit more.
Tobias Kunze: Design partners are people who are really excited about what you want to do and are willing to spend substantial time implementing it in their environment and then help you develop the product further. They want to learn what you do and how it can help them in their job and they tell you openly what is and what is not helpful and in which direction to potentially extend your product. It is absolutely vital to not only have such people but you also need to build that relationship over time as much as you can. Not every design partnership works out, but it’s essential to build those relationships.
Alexander Ferguson: How long did it take you from getting the first funding round to getting Glasnostic built? What was the process like?
Tobias Kunze: Three years, although that’s probably different for every company. I think it is ultimately a function of how much money you throw at your idea and what your read of the market is in terms of how quickly you can scale sales. If you feel you’re still in the early adopter phase, it doesn’t make sense to throw a lot of cash at it. You just want to identify who are your most important customers and work on converting them one by one. And then, once you’re past the early adopter phase, that’s when you scale up. Because if you don’t, you’re going to run out of cash. Managing market timing is the most critical skill at that point because, in the end, you are still acting on just a market hypothesis. So you need to measure exactly how the market reacts and adjust accordingly.
Alexander Ferguson: As you mentioned earlier, time is one of our most precious resources. So what’s your typical day like?
Tobias Kunze: Our entire engineering team is in Taipei, 15 hours ahead of us on the West Coast, so I start my day by catching up on what happened while I was asleep. After that, I try to get some “maker time’’ in for things that require flow. During the early afternoon, I then try to take a break because things tend to go crazy again when Taipei wakes up towards the late afternoon. I also set aside 15 minutes every day to review whether what I’m doing is actually what I should be doing, which prevents me from falling victim to my routines.
Alexander Ferguson: If you look back to the beginning of your founder journey and you could give yourself a word of wisdom, what would you say?
Tobias Kunze: I’d remind myself that, as technologists, we tend to underestimate the importance of getting the product to market—probably by three or four orders of magnitude! As developers, we are actually pretty sheltered. We live in a very comfortable place that is surprisingly predictable. You need to get out of that mindset and ask yourself: “What is the most important thing I could be doing today?” Getting your product to market is the most important thing. We need to remind ourselves that we live in an extremely demand- constrained world. As a result, it is challenging to get anything to market.
Alexander Ferguson: Fantastic. Thank you so much, Tobias, for sharing these insights from your journey!
Tobias Kunze: My pleasure. Thanks for having me!