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“VCs Are Portfolio Managers, They Are Not Trying to Build Companies” With Gene Banman CEO of DriveScale

VCs are portfolio managers. They are not trying to build companies. They are trying to find and invest in winners (If they find a winner, they will help to build it, but that is not their focus). It took me a while to learn how to pitch a “winning story” instead of a “company building story.” I got my head handed to me in the early pitches.
I had the pleasure of interviewing Gene Banman, CEO of tech startup DriveScale, the leader in Software Composable Infrastructure (SCI) for modern workloads. Gene has been a serial CEO for the past 15 years, leading companies such as NetContinuum, Zero Motorcycles and ClearPower Systems. Before being a CEO, Gene was a member of the senior management team at Sun Microsystems, leading the Workstation product group, pioneering the company’s thin-client technology, leading Sun’s first original design manufacturer (ODM) deal and sponsoring the acquisition and open-sourcing of the Star Office suite, which propelled it to a globally-trusted brand.

Thank you so much for doing this with us! What is your “backstory”?

I am an almost 40-year veteran of Silicon Valley, coming there to work at Intel in 1979. Most of my career was at Sun Microsystems during its heyday from 1985 to 2000, where I was a product manager, sales rep, President of Sun Japan and GM of the Workstation business unit. Since then I have been a serial entrepreneur, having been CEO at NetContinuum, Zero Motorcycles, ClearPower Systems and now DriveScale.

Can you share the funniest or most interesting story that happened to you since you began leading your company?

I was having breakfast with one of my old Sun Microsystems friends one morning — just keeping in touch, you know. He started describing this new startup that he was thinking of joining. Frankly, it was at the end of the breakfast and I was starting to zone out. He stopped talking and I said something like, “that sounds interesting…” Then I replayed what he had just said in my head, and I did a mental double take, “Wait a minute! You said they are looking for a CEO?” I almost missed the opportunity to join DriveScale by not paying attention at breakfast. Fate turns on small chances.

What do you think makes your company stand out? Can you share a story?

We have the most amazing combination of computer system architecture and networking software expertise in our company. One of our founders was the chief architect for eight generations of Sun Workstations and five generations of Cisco UCS computer systems. The other founder wrote much of the networking stack in Sun OS, invented IP Switching and founded Ipsilon to implement this idea, which he sold to Nokia. Two of our early engineers were instrumental in the development of the HDMI standard. With this background in computer systems design and network software, we have been able to build the technology to construct computer clusters out of commodity components, on the fly, in the data center and on demand. No one else does this.

What advice would you give to other CEOs or founders to help their employees to thrive?

Provide an honest, open, fair work environment and then challenge their employees to run their own show within the bounds of their charters and within the company’s goals and budgets.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are?

Yes, Scott McNealy. He provided that honest, open, and fair environment at Sun Microsystems, which allowed me to thrive there. I want to do the same for our employees at DriveScale.

How have you used your success to bring goodness to the world?

At Sun, I sponsored the acquisition of Star Office, which enabled that technology to become the standard Office Automation software, Open Office, for Linux and Unix systems everywhere. At NetContinuum, I worked to establish a new kind of cybersecurity technology called application layer firewall, which provides smart protection against hackers to the world’s commercial web sites. At Zero Motorcycles I helped bring electric drive technology to the fun part of the transportation industry! Now at DriveScale, we are bringing the advantages of hyper-scale computing to smaller enterprise data centers, making the lives of IT workers there easier. You almost HAVE to do good to make money, if you do it by providing value to your customers.

What are your “5 Things I Wish Someone Told Me Before I Became CEO” and why.

  1. VCs are portfolio managers. They are not trying to build companies. They are trying to find and invest in winners (If they find a winner, they will help to build it, but that is not their focus). It took me a while to learn how to pitch a “winning story” instead of a “company building story.” I got my head handed to me in the early pitches.
  2. Starting a new category is very hard. Application Firewalls; Electric Motorcycles; Composable Data Centers? What am I thinking? I guess if someone had told me how hard it is, it wouldn’t have mattered. Establishing a new category IS hard, but it’s where the fun is.
  3. Almost all my time would be consumed with fundraising and dealing with people problems. I love product strategy, go-to-market strategy, channel strategy — but I don’t get to do those things. I have to delegate most of that so I can raise money and develop the team.
  4. Not all investment money is the same. It comes with board members attached and you live with those board members for years! You’d better like them. I was very lucky with my first few funding rounds and accidentally got great board members. Later I saw some terrible board members in action (not mine), and since then I’ve been careful about whose money I take.
  5. Go to market overseas as soon as possible. The old rule was to establish your business in the US and once you have a firm base here, launch in Europe and Japan, then the rest of the world. Today, you better have a China strategy right from the get-go. Europe can also often be a more receptive market for new technologies than the U.S.

Some of the biggest names in Business, VC funding, Sports, and Entertainment read this column. Is there a person in the world, or in the US whom you would love to have a private breakfast or lunch with, and why? He or she might just see this :-)

Jeff Bezos! He’s turned any number of markets and categories upside down. He’s avoided convention at almost every turn. His organization drives forward on every front. I’d love to get his view on managing people and how he’s made his organization as aggressive as it is.