Diamonds: An Immigrant’s Startup Story
How determination, sacrifice and a few shiny rocks came to define my life and career.
Fortune favors the brave. -Publius Terence
I was born in Johannesburg in 1979. I don’t remember much from my seven years in South Africa besides some faint images of my Granny’s house and learning to ride a bicycle in our neighborhood. But I do remember experiencing the indirect effects of Apartheid.
Shortly before we managed to move to the United States, my three siblings and I were waiting in the car while my mom and dad ran into the bank. Outside the bank there were two elderly ladies begging for loose change; both were sight impaired, likely blind, and they were black. All of a sudden, there was a commotion and we could hear police sirens approaching. Within a few minutes, you would have thought the bank was being robbed with all the police cars and paddy wagons lined outside.
The situation turned violent quickly. As the women struggled to understand what was happening, the police grabbed them, smashing their loose change to the sidewalk and dragging them forcefully into the paddy wagon. I remember seeing these grown men with police batons wailing on these poor women. I remember my sisters and I screaming and crying. A few minutes later they were gone; only the glittering of loose change on the sidewalk remained.
This was 1986 in Apartheid South Africa. My parents were desperate to raise me and my siblings in a better environment. But leaving wasn’t so easy — with the economic sanctions issued by the U.S. and other countries, you couldn’t leave with more than a few thousand dollars. My parents were determined to find a better life for us in America, so they sold or gave away all their possessions that wouldn’t fit into six suitcases.
To this day I cannot comprehend the courage it took my parents to take this leap of faith.
After a long flight, a stop in Cape Verde for fuel, a run in with Russian fighter jets and bumping into the tail of a hurricane off the Florida coast, we landed in John F. Kennedy International Airport in New York City.
At some point in this little adventure, maybe before we left or maybe while we were on the plane, I found out that my parents had purchased a couple of diamonds with cash they couldn’t bring into the U.S. — knowledge a 7 year old probably had no business knowing.
As if to prove this point to my parents, when we finally got to the front of a very long line at Customs and Immigration, I had the urge to start yelling, “Whose got the Diamonds?” at the top of my lungs. I’m pretty sure my parents considered killing me. Somehow, we managed to make it through Customs unscathed, with the diamonds hidden in a sock.
My dad would later use the diamonds to pay rent on a small apartment in a suburb south of Salt Lake City. He was a janitor at a community hospital, cleaned an all-you-can-eat buffet after it closed, and attended classes at the local technical college. We were poor in those days, but we were rich in hope and belief that coming to America would bring a better future. Those two small diamonds helped my parents ensure we had a roof over our heads in those early days — but not much more. They had to work hard for everything we had and that has never been lost on me. I am truly grateful for the sacrifices they made and their ability to overcome the fear of the unknown to bring me and my siblings to a better tomorrow.
What I didn’t know is that decades later, diamonds would again play a big role in chasing the American dream, and my family’s survival.
It’s July of 2011, and I’m brimming with excitement and enthusiasm; I’ve just left my job at Backcountry.com and my friend Alen and I have decided to burn the proverbial ships and co-found a startup.
It had taken months of cajoling Alen to quit his job and do a startup. I felt I was two feet in already. We had both worked at Mozy in the early days, building one of the first cloud backup solutions. We both saw how quickly it was sold to EMC and how quickly a big company screwed up one of the true pioneers and innovators in the cloud industry.
While Alen was working at MIT’s Lincoln Labs, he had been playing around with an indestructible peer-to-peer storage system he coined Flud; it was on hold as he moved out to Utah to build Mozy’s distributed file storage system. He still had hopes to resurrect Flud in the future, but also recognized there was one major hurdle to the system becoming viable.
P2P storage requires a level of redundancy to ensure all the data is safe and available. Doing straight replication of files doesn’t work because it uses too much storage and the reliability is still not viable. For example if you installed Flud on your laptop or desktop and traded storage with other peers, every time you or other peers turned off your machine, all that storage went offline making the system unviable. But in early 2010, the market saw an influx of cheap Network Attached Storage (NAS) devices. These were small home servers with a hard drive attached to them. You could plug a NAS into your home router and have terabytes of storage. Only one problem: hard drives fail often and there was no way of ensuring your data was reliably safe.
It was clear to us that the opportunity to solve this problem was in front of us. We set out to build a company we called Space Monkey which would provide the cheapest cloud storage solution possible. We established our “first principles” in the same way Elon Musk had for Tesla. Space Monkey believed the first principles of Cloud were: Network connection, storage and processor. All the other “stuff” in data centers are a cost burden, things like physical buildings, fire suppression systems, cooling, security systems etc.
We knew that if we did this right, we would have more than a 10x advantage over our competitors in the cloud like Dropbox, Box, Apple and others. And with smartphones and video storage growing exponentially, this should be a no brainer.
We dove in. Learning everything we could about startups and fundraising. I was naively optimistic we could raise a seed round in 3 months; partly because that’s how much savings my wife and I had in the bank, and besides, how hard could it be raise money for a hardware startup going up against Dropbox, Google and Amazon?
We did all the necessary steps of building out a financial model, not because models determine success, but because they help founders understand the different variables in the business and how the model evolves as those variables change. We built a visually appealing pitch deck that also had a little flare for the unusual. Sometimes it worked and sometimes it didn’t. Our pitch deck was a revolving door of changes from pitch to pitch.
We loaded a bunch of podcasts onto a USB drive (This American Life was one or our favorites), jumped in Alen’s car and drove to the Bay Area. I drove and Alen coded on the prototype. Despite Utah having a strong tech scene (Novell, Wordperfect, Omniture, Lucid, Qualtrics etc) its never had a strong Venture Capital community, so fundraising on Sandhill was in our minds the only real opportunity.
Our first two pitches were terrible. I mean so bad I remember sitting down at a Subway sandwich shop, comatose, thinking Space Monkey had died before it was alive. Alen bought me a cookie and a Diet Coke. As we sat eating our cookies we talked about the pitch and what we learned. We needed more practice, we needed better transitions, we needed a demo, we needed to be comfortable telling investors “we didn’t know” to questions we didn’t know. And most of all we needed to believe we were the experts in the room. We had built complex storage systems in the cloud and we understood their limitations.
It wasn’t overnight. In fact it took months and months with multiple visits to the Bay Area. We ate cookies after almost every pitch and we discussed what went well and what we could do better. Slowly investors started to gain interest; nobody was saying, “No”. But no one had said, “Yes.”
We doubled down on following up with investors, pitching new investors and working our AngelList profile and network. But things were starting to get desperate as my wife and I went past our 3 months savings and started to dip into a pretty small 401k and credit cards; I even hung out with college students donating plasma for $40 to buy household essentials.
One of the most difficult times in this period came after a trip to Boston to meet Antonio Rodriguez, a partner at Matrix. In a previous life, he tried to build a startup around a home server running intel hardware. His timing was difficult because home internet speeds and the cost of intel hardware made success unlikely. He loved what we were doing and wanted to meet Alen for dinner and discuss a possible term sheet. Funding would be conditional: we would need to move out to Cambridge to work closely with him on the project.
Move to Cambridge? I had moved to four different countries and multiple cities while growing up and waiting for a chance to fund my dream company: Hell yes! I talked with Alen and we agreed to go back out to Cambridge and have dinner with Antonio.
I don’t remember much about that dinner except that it was an expensive, dimly-lit restaurant and the conversation was insanely exciting (Antonio and his brother are super sharp dudes and know a lot about cloud computing). And then the bomb dropped. Alen told Antonio there was no way he’d move his family back to Boston; with two teens settling into high school it wasn’t the right thing to do. I was devastated. It meant no funding.
We flew home empty handed, but at the same time Alen and I had learned a very important lesson about how to make founding teams work. He needed this veto, and in the future I might need a veto like this. We both understood the importance of checking our own emotions when making an important decision. From that day forward we would ask how important the decision was to the other and then take inventory of ourselves and how important it was personally. This made it really easy to abdicate to the person most vested in the particular problem and solution. We have never had a fight in our 8 years working together.
But we still had no funding and my personal situation was getting worse. One evening my wife Ambrie and I had a discussion about getting a job and working Space Monkey as a side hustle. The next day I went into the office to let Alen know and start priming my resume. There was only one problem: I didn’t have the courage to tell Alen. I barely spoke all day, and by the time I got home I felt completely helpless. I didn’t tell Alen I needed to bail, and now I need to face my wife.
I can still remember walking through the doors of our old house that evening. Head down, all I could stare at were my shoes. If I looked up I would have started crying. Ambrie met me at the door with laundry basket on her hip. I was mustering the courage to tell her I hadn’t told Alen and I hadn’t worked on my resume. She got the first words in: “I got us another couple of months. You don’t need to quit Space Monkey.”
My immediate reaction was how? Today I joke when I tell this story that I counted the kids to make sure they hadn’t been sold on Craigslist. But I knew. She had once brought it up and I had discouraged it. But she did it anyways: She sold her wedding ring to make sure we had enough to go a few more months down this journey. We both cried and we hugged. After we put the kids to bed and she had fallen asleep, I went back to work.
For a second time in my life a diamond had been used to give me shelter, to open up better opportunities for me and my family. With only days left before we ran out of money again, we landed our first funding. Once the first investors were in the rest fell like dominos. We were off to the races.
I am forever grateful for both the sacrifices my parents made to bring me to this country of opportunity and those of my wonderful wife because she believed in me. Success is hardly achieved alone. In my case, there have been many who helped me along the way, but none more than my parents, my wife, my cofounder (work wife) and a couple of small diamonds.
People say I’m crazy
I got diamonds on the soles of my shoes
Well that’s one way to lose
These walking blues
Diamonds on the soles of our shoes — Paul Simon