“I actually didn’t like the idea,” Backupify CEO and Co-founder Rob May said of his initial take on the B2B cloud storage provider. “We never intended Backupify to get big.”
When the now Cambridge-based company first started out in 2008, May and Co-founder Vik Chadha intended it to be a consumer cloud-to-cloud product for Twitter, Facebook and blogging sites. “It was just sort of a side gig,” said May, who, at the time, was working at a separate startup in New York City that was about to run out of money. “We funded [Backupify] with our own money, and put in $15,000 each for development.”
But what was once a hobby project was shaping up to look like a full-time opportunity. Soon after, May and Chadha began receiving good feedback and strong interest from friends and colleagues. The duo relocated to Louisville in May’s home state of Kentucky. The biggest problem, however, came with the price of the product itself, said May:
It was clear that, early on, there was something here. But ultimately, we realized that we didn’t have a good business model. It was too expensive to acquire customers … we knew we had to make changes.
So, they gambled. In 2009, they raised $125,000 in seed led by First Round Capital with participation from HubSpot Co-founder Dharmesh Shah. With a little funding to fall back on, May and Chadha made the decision to branch out from the strictly B2C play, and launch Backupify’s beta offering as a consumer cloud email backup product.
Soon, calls from companies began streaming in begging for backup within other online products like Google apps, Word documents, calendars and more.
“I wasn’t sure exactly what a business-to-business startup would look like, so we listened to the user base … and after a few people call you with that message and those questions, you start saying ‘Yes,'” said May, laughing.
With the promising early feedback in the startup’s favor, Backupify raised a Series A worth $4.5 million, co-led by Avalon Ventures and General Catalyst, before moving to Boston. The seven-person team settled into General Catalyst’s Cambridge basement before relocating to a “really crappy office space” and ramping up its hiring and product efforts.
“I was worried at one point that we weren’t going to have enough funding for the money we needed to pay Amazon. Network [prices] were getting so high … but investors backed us anyway. We burned through some money faster than they thought,” admitted May.
That moment of instability, however, is often where entrepreneurs stand to learn the largest lesson, reflected the CEO:
Startups are hard. A lot of bad things can happen, and you really have to align yourself with people who believe. Anyone can be an investor or team member when thing are going good, but what happens when the chips are down? Will your investors back you? Will your employees jump ship?
The biggest question, according to May, is whether or not “you have the stomach for it.” Startups in the media are typically portrayed as an extension of college days of camaraderie. Some employees join for the perceived promise of cracking beers and playing ping pong with co-workers.
But, countered May, “There are a lot of dark days."
Those things don’t get publicized. From the outside looking in, it seems that all these companies are rocketships, but most flog along for five to six years before that rocketship moment … that’s how it’s supposed to work, and that’s why they’re so successful.
Now, Backupify seems to be well on its way toward its own “rocketship moment.” In 2013, the company grew from 24 to 52 employees and moved into a new space in a converted church in Central Square. Backupify garnered just over $1 million in revenue in early 2012 and has plans to “well-cross $10 million in revenue in 2014,” shared the chief executive. “We won’t be profitable for 18 to 24 months, but we have some key milestones,” added May, noting that the company wants to get to 100 employees and $200 million in revenue.
Said May in closing:
We’ve crossed a lot of the Death Valleys that a lot of startups go through … It’s hard and stressful, but it’s also really, really beautiful when you get to the other side.
Image via Avalon Ventures
