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SAN FRANCISCO, CA JUNE 23, 2018: Orange nVidia logo on balloon in an urban setting
Just because you start a company and raise tens of millions of dollars to fuel it’s growth, there’s no guarantee you have what it takes to build a large company.
In fact, some 60% of founders do not survive their Series D round of venture funding.
This comes to mind in considering San Francisco-based database supplier, Kinetica. Founded in 2009, Kinetica raised $50 million in June 2017 — bringing its total to $63 million in funding. Six months later, Kinetica’s board replaced the its cofounder and CEO — Amit Vij — with Paul Appleby, an experienced sales executive.
Kinetica — which seems pleased with its handle “the insight engine for the Extreme Data Economy” — says that its technology “combines artificial intelligence and machine learning, data visualization and location-based analytics, and the accelerated computing power of a GPU [Graphical Processing Units made by the likes of Nvidia to run video games] database.”
Simply put, Kinetica joins other companies — such as MapD, about which I wrote in July — that put the GPU at the core of their technology rather than the CPU [central processing unit] that powers traditional databases. Given the demand for rapid graphical display of data analysis, the GPU-based technologies ought to have an audience beyond video gamers and animation lovers.
To its credit, Kinetica has built relationships with companies and technology partners to bring this idea to life. Kinetica seeks customers from industries including healthcare, energy, telecommunications, retail, and financial services. And its technology and marketing partners include NVIDIA, Dell, HP, and IBM.
Kinetica competes with Microsoft, Oracle and IBM which supply traditional databases.
I don’t think Kinetica should worry these rivals since the startup is so small. But since Kinetica and MapD — which counts the chipmaker as an investor — are using the NVidia GPU — specifically the Tesla and DGX for AI, data scientists and big data researchers; and GRID for cloud-based visual computing users, according to its latest quarterly report — their success should be helpful for NVidia investors.
(I have no financial interest in the securities mentioned).
The brains behind Kinetica are Vij and his Kinetica co-founder Nima Negahban. As Fortune wrote, “They worked at the United States Army Intelligence and Security Command and the National Security Agency creating a system to track and capture terrorists in real-time. The U.S. Postal Service has used Kinetica since 2014 in a system that optimizes routes and tracks packages.”
Vij lost the top spot at Kinetica to Appleby in December 2017. The company was looking for “sales momentum” and in Appleby — who had most recently served as president, worldwide sales and marketing, at BMC Software (and previously as an executive at Salesforce, C3 IoT, and Siebel Systems) — Kinetica director, Ray Lane, seemed to think he fit the bill.
As Lane said last December,
2017 has been a breakout year for Kinetica, doubling headcount while it onboards and grows new customers and partners around the globe. There is considerable demand today for Kinetica’s speed and capabilities produced by its native GPU-accelerated, in-memory architecture. Paul recognizes the strategic nature of the enterprise data challenges Fortune 2000 companies face, and how Kinetica can accelerate real-time insights from any data sources, regardless of volume, velocity and structure. Paul’s proven experience leading global growth teams, plus the drive to take Kinetica to the next level, makes him a unique choice for Kinetica.
Appleby has delivered growth. As he said in a September 16 interview, “At the beginning of the year we had 70 to 80 people and now we have 110. In the first half of 2018, we grew bookings 156% and the number of net new customers by 190%. A significant number of our existing customers are expanding their relationship with Kinetica.”
To get Kinetica to the next level, Appleby said the company is organized by function. “We’re an innovation-driven company, and the majority of our employees, two-thirds of the company, are engineering and innovation-focused. Almost half of our employees are based out of our Arlington, Virginia engineering office. Our admin, finance, people, and marketing functions are San Francisco-based, and our sales team is distributed across Europe, Asia, and the United States,” he said.
Appleby believes that everyone who works with a company — including its leadership, employees, and partners — should be “aligned to a common set of strategic goals and objectives. As such, creating an environment where all parties feel ownership of the company strategy and alignment to that is a the top priority. Our objectives span product, ecosystem, customer success, and culture. We use them to formulate our employees’ MBOs [Management by Objectives] , and to guide our company direction holistically.”
He chairs Kinetica’s Executive Leadership Team (ELT) which includes executives from its “product development, customer success, sales, marketing, and finance [functions]. ELT meets regularly to plan, track, and execute on our key objectives. Every member of the team has detailed dashboards that map to key metrics that measure progress towards our objectives.”
Kinetica holds everyone accountable for results. “On a quarterly basis, our executive team determines key outcomes we want to achieve, in accordance with our strategic objectives. These leaders then meet with their teams and determine MBOs for each employee that help us meet those objectives. The MBOs change each quarter, but they are always formulated to meet our strategic goals,” Appleby told me.
Everybody in the company knows how their success will be measured. As he said, “We link metrics and objectives by following the Objectives & Key Results (OKR) model used by Facebook, Amazon and Salesforce. The metrics, or key results, are in place, at company, departmental and individual levels to gauge progress. Each employee has a specific set of measurable, quarterly MBOs that act as the metrics to track progress towards our company objectives.”
Kinetica’s MBOs seem much more specific and measurable than its goals/objectives which are meant to inspire. For example, Appleby said one of the companies objectives is “Change the world by helping companies innovate and transform in the post-big data world.”
Two MBOs associated with that objective seem to drive people to finding good sales leads and achieving high customer retention. The first MBO is “Identify the number of companies that are tackling new initiatives. This gives us an indication that companies can use our technology to drive their business forward as we enter the extreme data economy.”
The second is to achieve “high customer retention rates [which] give us a way to show we’re delivering value and are critical to our customers’ business,” he said.
With Kinetica and MapD growing rapidly, demand for NVidia chips could grow as well. In its second quarter, NVidia enjoyed 77% growth in its so-called Datacenter revenue, which included Tesla, GRID and DGX, according to its 10Q.
It remains to be seen whether that will be enough to propel its stock.
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