Interview with John Ives, Co-founder, Storage Markets

Storage Markets ( is a new, Boulder-based startup that is combining an online, predictive market, with the storage industry. John Ives, co-founder of the firm, took a break from digging out from under a very large pile of snow to join fellow founder Rich Pappas, in talking with us about the company. They gave us a better understanding of how the company hopes to use the idea of a predictive market to help storage users and others better understand trends in the storage industry.

Techrockies: Can you tell us a little bit about what the whole idea of a predictive market is, and how it is useful?

John Ives: The way we explain this to folks who aren't familiar with predictive markets, is we've created a web site where a community of people, in this case storage industry professionals, end users, vendors, analysts, and press people can get together and trade virtual securities among themselves--just like buying or selling stock in a public market. The securities reflect a claim or the likelihood of a future event occurring. In our case, we make a market on securities that try to answer questions very unique to the storage industry. For example, when will iSCSI have a higher market share than Fibre Channel--2007, 2008, or 2009? Those community of people who gather to trade securities have some insight into the fourteen or fifteen market research topics available now, and they trade based on any source of insight they have--whether that is work, what they've read, and what vendors are telling them. As we create a very diverse community of people trading on this information, our results will improve and improve over time.

Techrockies: Why a predictive market, and what's the use of one?

John Ives: We chose a predictive market because it's a tool that is good at predicting events. There are a community of people who are interested in the events, and getting insight into those events. The storage industry itself has several vendors of classic market research data. These are based off of polling, surveys, and mechanisms like that. No one is trying something new like that with predictive markets. We think this can yield a much better product--better, cheaper, faster. It's better because it's vendor neutral, there is no editor, or editorial filtration; it's very fast at getting immediate results for customers; and reflects changes in the industry really quickly. Instead of having to wait six to nine months to design a survey in the classic sense, we can pull together a virtual market for customers within two or three days. We see good, indicative results in a week or two. Given the nature of the tool and environment, we can offer it at a much more attractive price point, so you can do more market research, and you can end up with better, higher quality results.

Techrockies: So who would be the market for that data? Are you competing with the IDCs and Gartners of the world?

John Ives: Our competition would be people who provide surveying services. When you see an Infostor or a trade rag posting a survey, they usually contract with a third party vendor to do an executive survey. We see IDC, Gartner, Infostor, and the analyst community as partners rather than competitors.

Techrockies: What's your background, and how did you tow end up starting the firm?

John Ives: The company was founded in January, and we went live with a beta in May. We are just a few days after we opened the site to the entire storage community. Rich and I have worked on several projects together in the last ten to fifteen years, and between the two of us have thirty five years of operational experience in the storage industry. In the last ten years, I have been active in the venture capital and startup space in the storage industry. I'm in Boulder, Rich is in Menlo Park, and between the two of us and where we are have good coverage of the two primary storage industry areas.

Techrockies: Can you tell us a little bit about your funding?

John Ives: There's no VC capital in the firm, but we have some outside private investors, who are active storage industry investors.

Techrockies: It seems like there might only be a small number of people interested in this, do you think you'll get enough people to get valuable information?

John Ives: We're already very encouraged by the progress we made over the summer, and over the last two or three days since we have thrown open the curtain. We're excited over acceptance of the tool as a trading device and virtual game to folks, and given the overall size of the industry it's a pretty good fit, notwithstanding that it doesn't take too many people to get usable and good quality pricing data and market research. If you look at attendance at events like SNW and the end user community and user groups, there's a potential to support a trading community with well over five to ten thousand people.

Techrockies: Thanks, and good luck!