Eran Kirzner On Raising $55 Million To Set The New Standard In Data Storage

Eran Kirzner is the co-founder and CEO of Lightbits Labs which offers solutions that separate storage and compute without touching the network. The company has raised $55 million from investors like Cisco Investments, Dell Technologies Capital, and Micron.

In this episode you will learn:

• Where to locate your offices
• Who Lightbits is looking to hire now
• The importance of making mistakes
• How all in you need to be to co-found a startup
• How to get in touch with Eran Kirzner

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About Eran Kirzner:

Eran Kirzner is the founder and CEO of Lightbits Labs, a computer storage software company that is building faster and more efficient cloud infrastructures, driving down storage costs, reducing cloud energy consumption, and providing better performance and latency.

Lightbits has raised more than $55 million from marquee strategic investors including DellEMC, Cisco, Micron and with investments from Chairman and Founder Avigdor Willenz.

Prior to Lightbits, Eran Kirzner worked for PMC-Sierra, Wintegra and Freescale in various storage and data communications roles.

Eran Kirzner holds patents in communication, QOS, processors architecture, flash, media-management and storage systems.

Eran Kirzner holds bachelor’s and master’s degrees in computer and electrical engineering from the Universitat Ben Gurion Ba-Negev and Tel Aviv University, respectively.

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have an exciting founder from Israel who is going to tell us a thing or two about how you separate storage and compute without touching the network. Without further ado, I’d like to welcome our guest today, Eran Kirzner. Welcome to the show.

Eran Kirzner: Thank you for having me.

Alejandro: So you’re originally born and raised around and out of Israel. Where in Israel?

Eran Kirzner: Correct. I was born in the most southern place in Israel, Eilat. It’s kind of a vacation-type city. Small vacation city, south of Israel.

Alejandro: Very nice. That didn’t go well with your background now because you’re now working, even in your sleep, as an entrepreneur. So, no vacation. Workation.

Eran Kirzner: Exactly. Yes. Exactly.

Alejandro: Good stuff. Tell us about your upbringing and your family, as well. Did you have any entrepreneurs in the family? Tell us about growing up.

Eran Kirzner: As I mentioned, I was born in Eilat, the most southern place in Israel, very close to the Red Sea. In my life, the main things that I would care of was being near the sea, surfing, diving, all this stuff. That’s what kids and teenagers are doing. Later on, I went to the army, and I started my career in the navy. Like the sea; stay at the sea. I was doing also electronics in the army and in [0:03:01] Defense Force. It was a great adventure. After the army, like many of the Israelis, I took some time off and traveled around the world, mainly in the Far East. So that was quite an adventure. Even today, when I get the chance to be in the same places that I was 20 to 30 years ago, as a backpack, it’s fascinating to see the difference. You go to India, and you see everything is much more developed. If you go to China, you remember the days, and I like to talk with the businessmen and talk about how it was 20 years ago. It’s always funny to have a discussion like that. 

Alejandro: Yeah.

Eran Kirzner: Traveling around the world, getting experience, talking with people, learning from new cultures. I started my university life. I did a Ph.D. in the University and then started my career as a Motorola semiconductor. This was long ago. But all a semiconductor was one of the best schools for engineers. It’s Motorola, Intel, IBM were the best places to start and learn, and I had the privilege to be part of the architectural team for the QUICC and PowerQUICC. This was the first communication [0:04:23] processor. We’re talking about the year of ’96, ’97. 

Alejandro: Got it. Your background is very interesting because you have not only the military, which gives you that rigor, and having that integrity on tackling whatever you have in front of you.

Eran Kirzner: Exactly.

Alejandro: But also, the background as an engineer as well and having that capability of being able to address those problems, maybe break them down into smaller problems, and then going one after the other. But here, the way that your career developed is that before you went at it as an entrepreneur, you did work a little bit in different companies. Why don’t we go through these different entities that you worked at and give us in a simple way what did you learn from each one of those? Like in one lesson that you got from each one of those experiences.

Eran Kirzner: Right. That’s a good point. At Motorola Semiconductor, I think that was one of the best schools. You get the principles and the methods, the deep engineering kind of thinking. Previously, in the army, you get to improvise, how to improvise, how to solve. You are alone in the sea, and you are sailing to some unknown location, and you have some technician problem; you need to solve it. You glue it. You walk around it. You take one machine, open it, and use another machine. It gives you the ability to solve the thing because you’re on your own.

Alejandro: Right.

Eran Kirzner: After going to the university, learning engineering, coming to the start of the industry, I would call it, walking in Motorola Semiconductor, you actually get the method. You understand how to analyze, how to do the calculation, how to do the right adjustment, and become the best engineering product. We did that. We really had the best engineering product out there. It was a first communication processor. We went to all the major customers out there. It was the days of Nokia, the days of Erickson, the Cisco days. Those were the giants. Today, the giants are Amazon, Google, and Azure. Back then, it was the major telecommunications. They were the giants out there, and we actually had designed with all of them. What we learned is that the method, how to serve customers, how to listen to customers, and to develop very rapidly and administer their needs.

Alejandro: Got it.

Eran Kirzner: Then, we spin out. A team of very talented engineers spin out of Motorola Semiconductor, and we create our own startup. It’s called Wintegra. This was my first startup experience. I was part of the founding team. We built the first network processor. This was amazing.

Alejandro: Yes.

Eran Kirzner: It was the first network processor that can deal IT and ATM. People don’t even remember what ATM is today. They think it’s automatic machine. It was the year of [0:07:42], 3G started. They don’t become LT. Again, we managed to penetrate to new markets, uncharted territory. So we really lead the industry by providing solutions. It took us time, and that’s one of the things that I carry with me from—because Motorola, you had all the open doors. You can open the door very easily. You have a very large salesforce. You have all the relationships, and you just need to bring the right technology out there.

Alejandro: Right.

Eran Kirzner: When you open your own startup, the team that you have with you is the ability to remember—to remember that if you do it right, it takes a long time; eventually, you can succeed. You need to press the restart button, and that’s what you do. It took us three years to win Erickson and to get into all their LT base stations. It took us so much time to get into Cisco, so much time to get into [0:08:43]. That’s the experience that I still carry with me to other startups I had, and also for LightBits that if you have the right product, and you know that you have the right product, and you have the persistency, eventually, you’re going to win it. There’s no fairytale here. It’s not that you can come, and customers say, “Wow! I was waiting exactly for that, and let’s use it. Tomorrow we can sell one million pieces.”

Alejandro: Right.

Eran Kirzner: It’s not working like that.

Alejandro: There are no overnight success stories. There is never an overnight success story. They take time and a lot of patience and persistence as you were saying. Right before LightBits, you were doing PMC-Sierra. What was this? Really in a summarized way, tell us what was the lesson there for you?

Eran Kirzner: Wintegra was acquired by PMC-Sierra. Basically, I got the opportunity at PMC to manage two startups. I managed [0:09:43], and Wintegra and also [0:09:44] other startups that were acquired by Wintegra called [0:09:47]. This gives me back the experience of multi-national, a very large design team, go across all over the world. I had a team in India, a team in Shanghai, a team in Austin, of course as team in Israel, and built all the collaboration between the different teams getting back to the process because PMC is a big company and this new crazy startup now adapted by PMC, you need to get them back into the right highway and put process in place, good working habit, release her with customer relationships. So this time was very strong. I always told my team, “You’ve been acquired by a company now, and you will see something will happen.” I think that’s the experience for every entrepreneur who is waiting for somebody to acquire it. Of course, you have the honeymoon in the beginning, and everybody likes you, and you bring the technology, and then there’s adaptation to the new company. What I always told my team, “There is a change. The change, you cannot notice every day of the change. You can not track it, but every day there is some incremental change that you’re becoming part of the parent company, part of Intel, part of PMC, part of whatever company just acquired you. Those people that stay behind with the old habit, only after three months, you will go into the open space, you go into the kitchen, and you see them lost because they didn’t adapt some of the procedure. They didn’t adapt some of the technique. They didn’t adapt some of the politics. They didn’t adapt some of the culture and habit of the company. So I told them, “You know, even if it’s annoying, you really need to pace-up. You need to make two steps ahead of what they expect of you. That’s the only way to integrate. That’s what happened. Eighty percent of the team you manage to integrate and start to work on a new product, new technology within the company. Some 20% say, “We used to work like that. We did things like that.” Eventually, they disappear and have to leave the company. You have to show them the way out, or they decide to leave because there is no cultural or technical field.

Alejandro: Yeah.

Eran Kirzner: This is one episode within PMC. Another episode I had with PMC, I was requested by the CEO of PMC to open a new incubation, a new kind of team within PMC and this was, again, for me, being part of a startup doing something new is always exciting because in my career, every three years, four years, I found myself doing something new. So, I’m starting something, I’m bringing it to the right point, and then for some reason, I need to move to something else. Is it a new market, new product, new company? For me, it’s very fascinating. It’s recharging again because you need to start from scratch and build it yourself. I was requested by the CEO of PMC to open a new team in Israel because communications start to go down unless people start to get—it becomes commodity, especially with the rise of all the Chinese products like [0:13:01], and others. All the communication giants, actually find themselves losing business to many of the Chinese vendors. The Chinese vendors, not just today of the right technology. Also, they have a very good kind of cross point because they got all the funding from the Chinese government and so on. I got the opportunity to build a new storage team. The team I had, it’s a privilege—go and select 20 people that you want for the entire site, and we’re talking about a site of, let’s say, 400 people. That’s how big it was in Israel. I was insisting to take only people from Israel because if you’re doing a startup, you want the team to be local. You want people to work day and night. You want them to work in the kitchen, in-home, the way to work and out of work, play together, do together. So I was insisting to take 20 people to work with me. I was selecting whether I want the sites, this was a great privilege—of course, select the top-paid people that Class A player because it can adapt technology and new technology. Now, the funny stuff that none of them knew storage. They didn’t know how to spell storage, you may say. So I have to train them on storage. You have the right people, and you know in startup, and I’m sure you know this as an, it’s first who, then what. So have the right people on the bus, and then if you have the right people, you can teach them, you can work with them, you can dream with them. That’s what we did. And, of course, it was not just relying on ourselves. We worked with experts from around the world. We learned from people from University. We hired a few people outside, and we build up the team, and we build the storage capabilities. This adventure was actually two to three years. We also acquired additional technology outside of PMC, and this was a silicon design team and built the first flash controller. So, together with the team in Israel and the teams that we acquired, we built a very nice business. We built the custom solution for SSD for the major hyper-scaler. We took part of the NVMe of the fabric definition. We built a custom solution for the top major all-flash-Array. So we got the opportunity to work with enterprise companies. We got opportunity to work with the hyper-scaler building them.

Alejandro: Eran, it seems that you guys were killing it. Then why did you go and go as an entrepreneur? This was, obviously, going to be the very first rodeo, so why did you take the plunge. What triggered that?

Eran Kirzner: Victor Vallance said, “Now, it’s in the news. Another company was founded, Habana. I don’t know if you heard about it. It was just acquired yesterday in a two-billion-dollar acquisition by Intel.” He was also the founder of Galileo acquired by Marvell for 2 to 7 million dollars and the founder of [0:16:16], acquired by AWS. Victor Vallance was the first investor at Wintegra. He was the guy that put the 5 million dollars. He comes to me. I was sitting at PMC. He had a corner office. I had a team. We built it on a nice avenue. He gave me a coin, and he said, “Eran, I think you have done enough for PMC. I think we need to do something new together. Let’s go for a new adventure.” It was a few months after AWS acquired Annapurna. I think Annapurna is a company everybody’s familiar with today. They are building the entire infrastructure for AWS. The [nitro 0:16:58] solution and all the fabric solutions they have and utilization for storage and so on. Victor brought all the networking expertise. I brought all the storage expertise, and we went to the journey of starting LightBits. Starting LightBits, it was not like two kids coming from Berkeley and saying, “We have a nice idea.” It was the other way around. A few experienced people that we assembled together, four, five, first co-founder. We talked with all the hyper-scaler trying to identify what problem they have, how they’re going to solve their storage problem because back then, people just solve the problem by throwing more hardware on the problem. You need a larger cluster; you need more performance; you need a better legacy. We are time to market, time to revenue. Boom. Throw more hardware on the problem and solve it. 

Alejandro: You mentioned you guys were four co-founders. You were mentioning that this was like the first rodeo so that not all of you had that level of degree like Berkeley or having a massive acquisition under your belt, so how did you guys first and foremost, manage the egos of having so many co-founders? Also, how did you guys go about reducing this steep learning curve of the execution that you had in front of you?

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Eran Kirzner: I think like with any startup, you need to check the ego outside of the door. It’s not just enough to check it out every morning when you come in, you really need to deposit it, so you’re coming with zero ego to the adventure. When you talked with some people, they say, “Yeah. I’m willing to take out the garbage. I’m willing to do this dirty work.” You really need to be all in with that. This metaphor cannot describe how much sacrifice you need to do with running a startup. Some people never had any startup before, and for them, this is almost an impossible journey. For others, if they had a startup in the past, they need to remember it. I like to give the example, the fact that you know how to run a ten-mile marathon, and you did it ten years ago, it doesn’t miss it tomorrow. You can get out of your door and just run ten miles or 15 miles. Just because you have a good memory of it doesn’t mean that you know how to do it today. That’s also part of the problems that you have of people joining a startup that think they can take the load of a startup. The startup journey is not one week. It’s one year. It’s a journey. You need to prepare for that.

Alejandro: A marathon, for sure. In this case, the business model, what you’re offering is solutions that separate the storage, and you’re able to compute without touching the network. What I wanted to ask you here is, it seems that you guys were able to wrap up very quickly because you raised quite a bit of money. So, how much money have you guys raised to date?

Eran Kirzner: We raised more than 55 million dollars. We raised money from multiple strategic partners. We raised money from Dell, Cisco, Micron, as well as from Walden, which is run by Lip-Bu Tan who is the CEO of Cadence, Victor Vallance and his group, of course, and Square [0:20:42]. We raised money, a combination of top angel investors, top strategic investors, and VCs. So it’s a good blending of money coming to the company.

Alejandro: Eran, the one thing that is really standing out for me is that you guys got large corporate strategics very early on, like Dell. Why did you guys think this was a good idea?

Eran Kirzner: We invented a new standard. We went through the journey. We talked with hyper-scaler, we understand the pain, we understand what’s out there and exists today, and maybe something we were even part of the contributor in the [past today 0:21:30] is not fit for the hyper-scaler. They cannot build a solution based on this. Then what we did, we partnered with Facebook, and we partnered with Dell and Cisco and others, and we invent a new standard, a standard called Engineer with TCP. People thought we were crazy in the beginning. There are multiple kinds of conferences. First years that we came with this first-standard solution, we send it today, organizer, and I won’t put the name out there. We’re sending to the organizer of the event, and they told us, “You guys are brilliant guys. Why you working on this stuff? It’s like bringing horses to a new clear edge.” It’s people that you really appreciate their opinion because they are the smarket leader, systems dynamic, and it’s giving you—you have to give a second thought to that. Even if you think you have the right solution, and people give you negative feedback, you think, “Maybe I’m wrong.” What we did, we took a good old TCP that everybody knows, and we took the bright new [0:22:37], it’s the best way to connect a storage to the CPU today, direct attach, point-to-point connected, and we blend the two together. That allows you to take any compute in the data center, and that center could be very large. It could be hundreds of thousands of nodes and even millions of nodes in some of the data centers and allow the compute to connect to any storage in the data center seamlessly. You don’t need to change your network. You don’t need to go and replace your switches. You don’t need to replace your network card in the client or in the server, and that’s the beauty. That’s the reason we built it. We didn’t want to be in a position that we built something that people can go, “Wow! That’s a good idea. Go talk with our CTO.” No, we want to study it now and today. That’s what we’re doing today. We can come to a location and within a few hours. I just had a customer in Europe that we came, we shipped him the system, he got the system out of customs at 10 am, and it was fully installed, up and running by 2 pm. That’s something that’s unbelievable. That’s exactly what we designed. Back today to the story, when we told them, “We want to put a few articles. We want to give a few pictures about this technology” and they gave us this negative feedback. We said, “No. Give us a chance.” Because we had a good relationship, “It’s okay. Take one hour at this break and go and pitch your solution.” Twelve months later, we submitted to the same person a set of articles, and he told us, “You guys get the full track. Everybody wants to learn about this technology. Everybody wants to work with this TCP. This is the only technology that can actually run in data center. It’s cost-effective. It’s caliber. It’s easy to deploy. Within 12 months, we managed to get the industry shifted 180 degree. We’ve done it because the technology is cool and right, but we also did it because we had the right partner. People like Dell, Cisco, Facebook, and Micron that help us to push it to the industry and get the full acceptance because if you have a good solution, it’s not enough. You need to have the right ecosystem around it—people to realize that they can use it. Intel also really liked it because it allowed them to give a counter solution to the solutions that were out there, the [0:25:12] solution, and the [0:25:13] solution was a proprietary technology. This a few storage softer solutions that can run on any hardware. That’s the beauty. 

Alejandro: Eran, for the folks that are listening, how big is the company today? How big is LightBits?

Eran Kirzner: LightBits has two design centers in Israel, and north of Tel Aviv. It’s [0:25:36], a place almost nobody heard of. Everyone in [0:25:40]. It’s given us the ability to hire smart people in the center of Israel and in the north of Israel, so near Tel Aviv University and near [0:25:48]. We also have another design center in California and San Jose. This give us ability to be close to the customers, and we have a sales team also in New York, which is all the financial. In China, as well as in Europe. In the company, we have about 70 people, and 90% of the team are still engineers. What we are doing now, if you hear me, we are hiring. We’re still hiring talented engineers, but we also start to hire salespeople and marketing, scale-out, and go and promote our solution. That’s the company today.

Alejandro: Looking back now, if you had the opportunity to speak to yourself and give yourself one piece of business advice before launching a business, what would that be and why?

Eran Kirzner: First of all, I’m happy where we are today. So it’s not like saying, “If I could do this, I can be faster, I can be smarter.” I think we’re in a very good position today. So if you look in retrospect, I think we took the right step. Of course, we made many mistakes, but you also learning from those mistakes. You learn and correct, and sometimes, you cannot get to Solution C if you haven’t done A and B before. I think all-in-all we are happy where we are with the type of engagement we have and as well the standard. We managed to put it out there as a standard. Now, it’s a commercial product. The only thing I can say, and I think it’s good advice for everyone: be open and listen to your customers because sometimes they give you hint and you are in this crazy race that you’re 100% sure what you’re doing, and you’re running. Only after you’re running, 200, 400, 500 meters, you look back and say, “I heard it. They told me that, but I haven’t listened.” Now, you need to go back and correct. My advice to myself, and I can give that advice, and I know that’s advice that I’m using every day. It’s hard to implement. It’s those kinds of things that it’s hard to say; it’s harder to do. Be more open. Listen more to the small voices, the smartness that’s coming from customers. They’re giving you some small tips to help you to shorten the time, so you have less people, you have less iteration, and you can be there faster.

Alejandro: Of course. And you build with data and not with assumptions. I love it. Eran, for the folks that are listening, what is the best way for them to reach out and say hi?

Eran Kirzner: You can drop me a message through LinkedIn. I’m active at LinkedIn. Of course, at Twitter. Drop me an email: er**@li***********.com – whatever works for you.

Alejandro: Amazing. Eran, thank you so much for being on the DealMakers show today.

Eran Kirzner: Thank you for hosting me. It was fun.

 

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