Interview with Todd Vernon, VictorOps

For today's startup interview, we spoke with Todd Vernon, the CEO and Founder of Boulder-base VictorOps, which is developing software for the DevOps and IT operations software. Vernon is a serial entrepreneur--who founded and was CEO of Lijit Networks, was co-founder and CTO at Raindance Communications, and has been a longtime mentor at Techstars. We caught up with Todd to learn more about his new company, VictorOps, as well as to glean some tips on successful technology startups.

What does VictorOps do?

Todd Vernon: What we do, is we build a software platform for operations and software engineers, to remediate or correct problems that occur in the system at runtime. If you look at real simple example of someone running an e-commerce platform, say eBay or something like Amazon, as examples to point to, those systems run 24/7. They're constantly making software changes to their platform, to enable features and make the experience better. Those platforms are also generating revenue 24/7. What happens, is there are inherent problems in software. Because you're constantly changing it, problems are being re-introduced all the time. What you need, is to allow operations, support, and software engineers to be able to respond really quickly to a problem. Time is money, and everything is 24/7 now. That's why it's much more critical of a problem to fix things that are broken in realtime. Our platform is use so when something breaks, such as a shopping cart breaks and someone can't check out, the team that wrote the software and who is responsible gets paged right away. Our application handles those push notifications to get those core engineers to fix the problem really quickly, capturing the information so they can solve it faster next time, and get their sign running again. People who buy seats on our platform are increasingly buying it for all of their engineers, so that they can respond with the right person for the right problem.

How did you get into the market?

Todd Vernon: I have had three startups, and all have been software service businesses like the ones I describe, where you build software, deploy it, and once you turn it on, you never turn it off. For over 20 years, I've been building companies that rely on the technology working all the time. This is simply a product that we would have bought at my previous company, if someone had offered it. When I went to start VictorOps, I went into it knowing that this was a problem domain that I certainly knew about from my previous companies, and had already built bits and pieces of what VictorOps is to support our own software. With the way things are going, one, most companies don't want to build that themselves, and two, the problem is getting worse. Ten years ago, you could have down time in your software. But, if you go to any web property today that transacts business, you don't expect to ever see a screen that says “Temporary maintenance, check back later.” That doesn't happen anymore.

Having been a serial entrepreneur, what lessons from your prior startups are you applying this time?

Todd Vernon: I think the most advantageous lesson, is that we got into a line of business that we intimately know. It is very tempting for entrepreneurs to create their next company, or even their first company, attacking some market that you only know a little bit, or don't know very well. They are attracted to that, because they are learning something new. The problem with that, is if you are even slightly wrong, or really wrong, there's a lots of possibility that your company will fail. If you're slightly wrong, you might have to pivot once or twice, and that costs time, money, and resources, and the market can pass you by, and competitors can pass you by. However, if you have inherently built a product selling to people like you, you know from the beginning what the product should look like without writing code. You don't have to put on a bow tie, and go out and figure out if you've solved a real problem for real people, and have to validate the use case. Instead, you inherently have already done this, because it's a product you would have purchased. Although it sounds easy, having a lser focus is the best piece of advice I could give.

What has been the toughest challenge you've faced so far in this market?

Todd Vernon: We entered the market with a competitor, which had a several year advantage on us. We knew that we had to be the innovation learder in the space, and could not just build a product just like their product. We took a wider viewpoint on the problem, and we decided to solve a real problem for a real person. We believe our competitor had only solved half the problem. Having someone coming into a market before you make you have to go twice as fast, and you have to have that urgency.

You've been a mentor at Techstars for awhile, any advice you'd give to entrepreneurs from that experience?

Todd Vernon: Make sure you are really solving a problem for someone, and not building a "nice to have" product. It's very tempting to create a "nice to have" product, and it's certainly very interesting. But, at the end of the day, people vote with their dollars. You have to solve their problems, and they're not going to pay for a nice to have product first. That's often a challenge with early stage companies. There are many entrepreneurs who haven't done it before, who are fresh out of school, who haven't seen a lot of problems. If their focus is to sell software to a business, a lot of the time, they haven't been in a lot of businesses themselves. It's very hard to predict how to build a product that would be super useful, versus being out there, without a team that hasn't come out of a company and seen the problem first hand, much like we have. I think you are going to start with a better solution out of the gate, if you build a must have, not a nice to have.

Finally, what are the next steps for you, and what are you working on next?

Todd Vernon: For us, we've had a lot of luck last year, in 2016, selling into much larger and larger accounts. We've grown from several hundred, to three, four, and five hundred seats at a single customer. Two years ago, we were signing 30 seat deals. That's the result of making sure we had great customer experience out of the box, and that we've been able to on-board customers easily. We've concentrated on those on-boarding functions, and we'll now be spending more money in the future on sales and marketing, to show them that we have a product everyone has to buy now. It's time to hit the gas, and keep the velocity of innovation of our product going. We've always been the innovation leader, and we don't intend to be any different going forward.