ThousandEyes' Unconventional Path To Its Acquisition By Cisco
A familiar story: two PhD students co-found a company based on their research, move to San Francisco and a decade later, sell it for a billion dollars. It's the stuff of legend in other parts of the world, and the business model for Silicon Valley.
At first glance, Mohit Lad and Ricardo Oliveria conform to type. They met in the PhD program at UCLA and co-founded ThousandEyes in 2011. Over the next nine years, they built the ThousandEyes to over a hundred million in annual bookings and today sold the company to Cisco.
But in ThousandEyes’ case, this simple narrative does not tell the full story.
I was fortunate to meet Mohit and Ricardo early in their journey, and joined the ThousandEyes board after Series A. Together with my friends and colleagues at Sequoia, Carl Eschenbach and Jim Goetz, we worked closely with the team for most of the company’s journey. From the beginning, there’s always been something a little different about ThousandEyes and it comes from Mohit and Ricardo being original thinkers, who are comfortable ignoring conventional wisdom.
That started with the founding idea. By 2011, the internet had transformed network computing. Whereas before companies had to build proprietary networks, now their traffic could run over the public internet. In the minds of most people, that solved the problem. To Mohit and Ricardo, it made the problem more difficult: how do you monitor network performance if it’s not your network? They were also quick to see the implications of this for the modern SaaS economy. If you are a SaaS company like Salesforce or Workday and customers are complaining that your app is unresponsive, how do you know if the cause is your code or their network connection? ThousandEyes is the only way to answer this question; it sits at the intersection of applications and networks, giving companies a “Google Maps” for their network traffic.
Having picked a problem that many did not see, Mohit and Ricardo then built a company in their own way. In the 2010s, capital was plentiful and growth-at-any-cost the imperative. As a result, many founders have felt compelled to build out large teams ahead of demand, which is challenging for company culture. By contrast, ThousandEyes is hand-crafted, brick-by-brick. The recruiting process is rigorous-to-the-point-of-ridiculous. The focus on product is unrelenting; customer obsession is extreme. The culture is intense but empathetic, human but quirky. No other company has given me a personalized bobble-head on my third anniversary (my 10 year old likes to ask it questions when he wants a “yes”).
The result is an exceptional business that’s built to last. Unlike its peers, ThousandEyes is one of the few infrastructure companies that has more in annual revenue run-rate than cash-burned in the entire life of the company — all while supporting a healthy growth rate. Customer NPS is high; retention and expansion are best in class. Many of the team stay long past their vesting cliffs, including several executives who’ve grown with the company over six years llike Mike Staiger, Sanjay Mehta and Dave Fraleigh.
It’s been a huge honor to work with Mohit and Ricardo, our friends and co-investors Stefan Dyckerhoff, Dave Munichiello, Brian Paul, and Umesh Padval, and outside board members, Sanjit Biswas and Godfrey Sullivan. Our congratulations to the entire ThousandEyes team. We hope you will bring to Cisco your love of superheroes, all things orange, plank competitions, bobble-heads, and the many other things that make ThousandEyes such a special place to work.