Fahri Diner is the co-founder and CEO of Plume Design which is is the creator of a Consumer Experience Management Platform for the curation and delivery of new Smart Home Services rapidly at scale. The company has raised $150 million from top tier investors such as Spark Capital, Jackson Square Ventures, or Qualcomm to name a few. Prior to this, he cofounded Qtera Corporation which he sold for $3.25 billion.
In this episode you will learn:
- The decision point for startup founders
- What makes a good product manager
- The key traits of a good CEO
- How to invest in startups
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The Ultimate Guide To Pitch Decks
Moreover, I also provided a commentary on a pitch deck from an Uber competitor that has raised over $400 million (see it here).
Remember to unlock for free the pitch deck template that is being used by founders around the world to raise millions below.
About Fahri Diner:
During his 15-year entrepreneurial career in the high-tech industry, Fahri Diner repeatedly demonstrated his savvy in conceiving compelling value propositions and building high-tech organizations to successfully execute aggressive business plans.
Having joined Sigma Partners in late 2006, Fahri Diner applies his expertise by identifying strong entrepreneurs with good ideas to help build disruptive, market-leading companies.
Fahri Diner was the Founder, President, and CEO of Qtera Corporation, which Fahri Diner led to become the leading provider of ultra-long-haul photonic networking solutions. Nortel Networks acquired the company for $3.25 billion, and Fahri Diner continued to lead Qtera as President of the wholly-owned subsidiary until 2001.
Before founding Qtera, Fahri Diner was a member of the executive team at Siemens, where he helped establish and manage the company’s Optical Networks business unit in North America, which was later spun off as Optisphere Networks.
Prior to joining Siemens, Fahri Diner led Pirelli’s pioneering activities in the optical amplifier and Wavelength Division Multiplexing (WDM) markets. The optical systems division of Pirelli was later acquired by Cisco Systems for $2.15 billion.
Just prior to joining Sigma, Fahri Diner founded Concept Ventures in 2005 by acquiring a portion of the assets of Applied Materials Ventures in which he served as Managing Director.
Connect with Fahri Diner:
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FULL TRANSCRIPTION OF THE INTERVIEW:
Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today, we’re going to have a lot of fun with the guest that we have. I think that we’re going to be able to really understand well the perspective and the mindset from both sides of the table – from the table of a VC investor from a fund that now has over 2 billion assets under management to a founder that has done several – a significant exit, knows how to build, knows how to scale, raise, and you name it. So, without further ado, I’d like to welcome our guest today. Fahri Diner, welcome to the show.
Fahri Diner: Thank you, Alejandro. It’s good to be here.
Alejandro: You spent quite a significant amount of your life in the U.S. Everything started coming here for studies, but I know that you were born in Cyprus. How was life growing up?
Fahri Diner: It’s a wonderful, boring island, perhaps I can say, in the Mediterranean. So, there’s most of the economy and so on comes from tourism in Cyprus. We’ll see how it will fare in the current times. But, yeah, I grew up there, largely on the beach, and then moved to the U.S. to study, and here we are. I’ve been in North America most of my life.
Alejandro: Why North America?
Fahri Diner: I was actually first in high school. I was an exchange student, so I came to the U.S. I lived with a family outside of Boston in a wonderful little town called Scituate, Massachusetts. My host family – my host father was an electrical engineer and IT graduate. That is the year in which I decided: I want to study engineering, and I wanted to come to the U.S. Of course, I don’t come from a family with a lot of means, so when I went back to Cyprus after my high school exchange program, my number one objective was to come back. That was my primary objective. But I needed a scholarship to be able to afford a school in the U.S., so ultimately, that’s what happened. I was lucky enough to get an academic scholarship to attend a university in the U.S., and that’s what brought me here. It was my exchange year that I fell in love with America, so I was 15 years old at the time. You know, here we go.
Alejandro: Very cool. You ended up studying electrical engineering in Florida. Were you always into resolving problems, like growing up, figuring out how to come up with solutions? You were talking about that you made the decision of becoming an engineer, but I’m wondering if it was like a process?
Fahri Diner: Ultimately, it ended up being a process, Alejandro, but I can’t say it was planned. I’ve always been, back in high school times, I was more of a left-brain person in terms of engineering and mathematics, physics, and all that kind of stuff, so that’s probably what led me into engineering. But throughout my career, it went from engineering and designing high-speed circuitry and designing fiber-optic communication components into more of a product management. Then, ultimately, onto building and running divisions of large companies, and into venture-funded startups that exited, and then ultimately, into venture capital. Now, I’m running a company again. So, as I mentioned, I like being on both sides. But that was the process.
Alejandro: Of course, and we’ll talk about them in detail, but I’m wondering if in your family, was anyone an entrepreneur, or was this like you developed, like being born with it?
Fahri Diner: I’d say that my father is quite entrepreneurial. He’s a chemical engineer, himself. He had spent most of his life in the olive and olive oil industry. He was a chemical engineer by training, but he’s been in the olive business. He’s 80 years old now, and he’s still working very much because he just loves it. So, I think perhaps the entrepreneurial DNA comes from there, but it’s also by way of my influences and what I’ve been exposed to, and I think being in North America and the U.S., it started with my host family in Boston. I think we evolve over time, but I can’t say that it just came from a strong desire to be like someone, so it just evolved into this.
Alejandro: After you got your engineering degree, you did a couple of stints at different places before you went at it with Qtera, which ended up being your first significant full-cycle experience as an entrepreneur. But I want to ask you here, during your time at AT&T, Pirelli, Siemens, and even OZ Optics, you were focused as an engineer, really focused on product. I know, as well, that you’ve mentioned to me that product managers and people that are around product typically make good CEOs. You’ve gone out to be a CEO and a successful CEO. What do you think those experiences around product, perhaps AT&T, Pirelli, or Siemens taught you about business?
Fahri Diner: I think we’re all victims of our own experiences. My opinions are formed by my own experiences. I do believe that. I am a venture capitalist. I am a CEO. I’m a founder, and I’m involved in hiring and firing a lot of people throughout these years. That is my observation in that a good product manager understands technology, appreciates the difficulty associated with building stuff because in product management, you need to balance the needs of what your customers are looking for and the capabilities of the team, and you ought to be able to talk the language of technology and products with your engineering team and have enough respect from them. At the same time, be able to understand the needs and constraints of your customers. So, there’s a business-level understanding. Then, of course, you become more of a project manager to make sure that things get developed, and various needs and constraints find the right intersection between the customer, financial intent, as well as what engineering can do.
Alejandro: And it took about, in this regard, eight years for you to really take the leap, and you were at Siemens. You were the Director of Product Line Management. I want to ask you here, what do you think really was required, or what do you think was the trigger for you to make that leap of faith? What happened for you to take a look and the opportunity of Qtera coming to you and saying, “This is it. I’m going at it.”?
Fahri Diner: That experience of what happened is actually an interesting story, by way of a company called Ciena. Ciena is a public company today. They were founded back in the ‘90s when I was back at Pirelli. I was a good ‘ole nerdy product manager/engineer. We had pioneered some of the initial work in Wavelength-Division Multiplexing, these multi-channel communications on fiber-optic networks. We were actually the first in space, but then this company got started, and they went after it, and they came in with a lot of conviction whereas, we were a bit more conservative, let’s say. Then, they built this company; they took it public. In 1997, it was a large IPO. That’s effectively what made me jealous, from a business perspective, saying, “Look. I understand the technology, the product. I can do that.” When I was at Pirelli, my intent was actually to go start a company. Through a friend of mine, I got hooked up with Siemens, who were interested in building a new optical communications division in the U.S. Siemens is a large conglomerate. They were very active in class-5 central office switches and phone networks back then, but they wanted to get into fiber optics, and the idea was really to – I said, “I could go there, build a company, or build a division inside Siemens. Then, the thought back then was to actually spin it out. So, luckily, I’m not a very patient person, so we went there. We built this division. We were quite successful getting the products into companies like NCI. This is currently Verizon. The Germans and the Americans, of course, when things were successful, everybody was fighting over who was going to own what piece of this spinoff. It was taking too long. So, as I mentioned, luckily, I’m not a very patient person, and that’s when I said, “You know what? The industry is moving.” We were at the boom times. This was post-the Telecom Deregulation when Clinton asked the telecommunication group, the Regulation Act, when all the competitive local exchange carriers were coming. So, that was the beginning of the infrastructure-built cycle. It all started with fiber-optic communications, and so on. That has now enabled what we’re enjoying today with social networks, whether it’s Facebook and Google, and so on. So, this content and social networking phase was all initiated back in the infrastructure of Bill Gates. Things were moving very fast. Fiber optics was very, very hot, and because I’m not patient, I said, “You know what? I’m going to leave and start my own company to do what I wanted to do.” So, that’s how Qtera, this fiber-optics communication company started and was born, with a lot of frustration.
Alejandro: Got it. Tell us about the early days of Qtera. Here you are, you go at it. How did you think about building the team and surrounding yourself by the right people and really bringing this to life?
Fahri Diner: Qtera was an interesting experience in that that’s when I learned about venture capital, as well. I was funded. The lead investor in the company was Battery Ventures out of Boston. It was out of their Fund 4. It was a 200-million-dollar fund, and I think we did a 5-million-dollar Series A at something like 5. I remember calling my dad after having left Siemens, and he was asking me, “What are you doing?” I said, “I started this company.” He said, “What do you mean you started a company?” I said, “Well, you know, I raised some money.” He goes, “How much money did you raise?” “I raised 5 million dollars.” My father said, “Fahri, that’s a lot of money. How are you going to pay that back?” I said, “Dad, I don’t have to pay it back. It’s equity invested in my company.” My dad goes, “What company? You were at Siemens two weeks ago. What company?” I said, “Dad, I sold half of the company for 5 million dollars.” To this day, Alejandro, I believe my dad still doesn’t understand how this venture capital works, where you have a guy, a young kid from Cyprus with a PowerPoint presentation, kind of a fire in the belly, and the desire to change the world, and in this country, people give you 5 million dollars against it. It’s an idea. Right? So, it’s hard to understand, I believe, to this day, for a lot of people around the world, that you can actually go sell half of a company for millions of dollars that you just founded or started or incorporated a few weeks before. That’s what’s fueling our innovation.
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Alejandro: Absolutely. It’s interesting. You’re talking here about a Series A that was 5 million. Now, this could be technically a seed. It’s unbelievable how times have changed, but in this case, with Qtera, it was quite a ride. We’re talking about three years and five months, and literally, you had a smashing hit of an outcome. What would you say, especially for the people that are listening, what ended up being the business model of Qtera?
Fahri Diner: The business model of Qtera was actually very simple. We built high-speed communications equipment. We were a hardware company. Today, it wouldn’t be a sexy. Back then, it was. We built a hardware company, and we were fast. I think time to market was key. In my opinion, having been on both sides of the table, startups win because of their ability to execute quickly. When time to market becomes the differentiator, whoever gets there first, wins. It’s a fantastic environment for the startup. Otherwise, most customers of startups don’t really want to buy from them. If they can buy from a large company, they would prefer to do that. It’s more stable, etc. So, when the environment is moving very fast, you get to make decisions very quickly. You take two steps forward and one step back, but you do that at a fast cadence. In my opinion, that’s the fundamental advantage of startups, whereas large companies oftentimes become paralyzed by their inability to make a decision, in an environment that’s moving fast, getting there before the competition matters. In an environment in a market segment that’s moving slowly, I don’t think the startups really win because the customers can always wait for the big companies. So, I think our outcome there, I don’t think it was about a business model innovation, but it was about time to market, bringing a product very quickly, and effectively sort of borrowing technologies from different industries. What I mean by that is, we built ultra-long hold communication systems. Think of fiber-optic networks that go from New York to LA with little or no regeneration, and instead of saying, “How do we do that from scratch,” we said, “How do they do it in the undersea networks. That goes back to my Pirelli days. We actively took what the undersea industry was doing, and made it a terrestrial product. It was a diverse group of people who looked at the problem from very different angles, but the key was their impatience. The key was the desire to get there before everybody else because we sensed we had a hunch that this was going to explode, and it is sort of what happened. I guess part of it is luck, as everybody would tell you. But then, I’ll go back to the venture thing. Battery Ventures, I was introduced to them through a friend. It was the first company to give me a term sheet. I took it, and I moved on, instead of saying, “Well, could I get a little higher valuation?” You would have missed the forest for the trees there. Perhaps we could have gotten a higher valuation and not have to give up 50% of our company, but they were ready to go, and we just moved on. To this day, in my current company, this kind of desire to act – have a prejudice for action is very important to me. I think it’s one of the principles that I believe in. Our current company at Plume, we like to say that while people work on the Pacific Standard Time Zone, Eastern Standard Time Zone, or Central European Standard Time Zone, at Plume, we work at the Now Standard Time Zone.
Alejandro: We’ll talk about Plume in just a little bit, but here, you guys for Qtera, you raised a little bit over 30 million and a really amazing outcome. At what point does Nortel come into the picture? Tell us about this deal.
Fahri Diner: We raised about 35 million in equity, as I remember. We raised a little bit of debt, as well. Nortel was the big dog in the industry at the time, and in optical communications, Nortel was the key. They ultimately were looking at the market was moving fast, so I think they were very smart by making the decision. We were a year, year-and-a-half ahead of them in terms of being at the right place with the right product at the right set of core technology that enabled it. They made a [19:53] decision, and could Nortel have developed that product, I think they [19:58]. That’s how we started. These competitive local exchange carriers were being created left and right, and big companies back then, NCI and Sprint, and so on, were under a lot of pressure to defend their turf. This was when the fiber-optic networks exploded. Again, all about timing. You’ve got to move.
Alejandro: What were the terms of this transaction?
Fahri Diner: We sold the company. It was a stock transaction, and it was valued at the time of Nortel stock, it was about 3.52 billion dollars in Nortel stock. Six months after we exited, Nortel stock doubled, so depending on when our investors, [20:49] or distributed, it could have been even bigger. Our Series A investor, who put in, I can tell you, companies like Battery Ventures, who put in more money – I think they put in 9 or 10 million dollars into Qtera, and about three years later, they pulled out about a billion dollars. Back then, it was a big deal.
Alejandro: Very nice. So, hopefully, they invited you to dinner, Fahri. Quite an exit. Here, I want to ask you. Obviously, you were in Miami with Qtera, really impressive to build a company like this in Florida at the time. Then after this deal, you decided to move to California. Why?
Fahri Diner: The company was actually not in Miami. We were in Florida, but not all the way down in Miami. We were in the Palm Beach area in Boca Raton, where IBM had big, big technology. Because of the tech space, a lot of my contacts and my life were spent in the Valley, in California. I know I had a lot of professional connections to California, and that was the first time in my life when you look at what’s happened, where I got to decide where I wanted to live by way of that opportunity and that exit. Oftentimes in your jobs, you know how it goes. Somebody offers you a better job, or you want to do something else, you pick up, and you go to where the job is. So, I said, “Look. The world is kind of my oyster, at the moment. Where would I go?” Certainly, I wanted to stay in the U.S. California, also by way of – not only climate but farming and so on. I come from a farming heritage from Cyprus. I thought, “I’m going to retire now.” I was almost about 30 years old. I was quite young back then. I thought I was going to retire. I decided, “I’m going to smoke cigars, and I’m going to grow a ponytail, and I’m going to retire in the wine country. I’m going to make wine.” So, I bought this vineyard. That retirement lasted about a week, I think. I came to this quick realization that in our tech world, things move very, very fast. Whereas, in the wine and farming, it’s a good balance to a fast-paced life. So I started making my own investments in the Valley, and one thing led to another, and that led me to venture capital.
Alejandro: You joined Sigma Partners, and you were quite active there and a significant and successful venture fund. What have you learned about patterns when it comes to identifying founders that have the potential of doing something?
Fahri Diner: This question gets asked a lot in the venture community because everybody wants to be right. You want to bet on the right companies, the right founders, so you can make money for your investments and make the right decisions. In my opinion – I’ve observed this. There are many venture capitalists who are very smart people with big degrees, MBAs from the right places, engineering degrees who don’t spend a lot of time as entrepreneurs, and they’ve proven to be quite successful. On the other hand, firms like us at Sigma, many of us are previous founders, engineers, or either people who ran large divisions of companies or founded and exited multiple venture-funded startups, our approach tends to be more around, not a portfolio approach, but optimization on a company by company basis. While we are in the finance asset class and venture capital, which is arguably the highest-risk asset class in finance, I and many of my partners, we’re creating companies. Of course, we invest largely in early-stage companies. So, you’re not taking a portfolio approach. We’re saying, “These three or four companies are not doing well. Let’s get rid of them.” You tend to, sometimes to our benefit, sometimes not, we tend to optimize each company as if it’s the only one in the portfolio. In terms of identifying a pattern in venture capital. I don’t know that there’s a formula that says, “Do this, and you will be successful.” So, people have done it with different approaches, but we often don’t look at a portfolio and say, “These six companies, they’re not going anywhere. Let’s just shut them down. We, in fact, tend to focus on those six companies to see how to fix that. We have examples where that worked in our benefit, where everybody else gave up on the company. We invested more money. We rolled up our sleeves because we’re all entrepreneurs who can help often, not always. That’s worked to our benefit, and there are also examples where I can tell you, we’ve gotten certain avenues to shut this thing down three years ago. Again, like I said, we’re all victims of our own experiences, and that’s how it goes in venture.
Alejandro: Of course. For you, once an entrepreneur, always an entrepreneur. So, Plume is your latest baby. At what point did opportunity come knocking again. After seeing many businesses that succeeded, many businesses that failed, your time as well at Sigma probably gave you a ton of perspective and perhaps things that you were able to reflect on, too, when you were operating before toward this latest journey. So, tell us about Plume.
Fahri Diner: After about eight years or so at Sigma, I got a little scared, frankly. The realization that I have come to is, as an entrepreneur, Alejandro, you’re always selling. You’re either raising money, or you’re trying to convince a customer to buy your product. You’re trying to convince an awesome prospective employee to join your company. You’re always selling; you’re always leaning forward. What I realized after six, seven, eight years in venture, I found myself in a situation where we were always buying. We were not leaning forward; we were leaning back. Smart entrepreneurs come, they’re pitching their ideas and dreams, and I found myself in a situation where I’m analyzing, I’m criticizing, but I’m not building in that decision stage. I felt that because I believe, as I was explaining earlier, there’s a model. I’m not saying it’s the only model – a success model perhaps by resonating with the entrepreneurs and approaching investments from an entrepreneurial angle versus a purely finance angle. Because I believe that’s important, you want to be able to continue to resonate with the entrepreneurs and understand how hard it is to build these startups. I got a little scared in that I was always buying. I thought maybe my entrepreneurial skills could – I didn’t want to lose them. I like being on both sides of the table, where now, I’m hustling the whole time as a founder and CEO of Plume, whether it’s customers or investors. That, I believe, keeps a good balance for me. I’m not saying this is right or wrong, or that it’s for everybody. I intend to do this. Plume, hopefully, will be successful and a big exit at some point. I’ll probably continue to invest and go back and forth. That’s what I enjoy. I’ve been in boardrooms on either side of the table as an entrepreneur, as well as an investor. Oftentimes, you’ll see a lot of investors and board members with a lot of opinions that don’t really matter, and entrepreneurs don’t listen to them. I’m not saying all of them are like that, but they’re often, though. You ought to be able to resonate and connect with the entrepreneur. You can only do that if you feel the pain. Maybe I like the pain.
Alejandro: Maybe. That’s something that, I guess, once you’re at it, you’ve got to go at it again. Here, you surrounded yourself by a founding team. I’m sure that you saw a lot of co-founding teams that worked; other teams that didn’t work, so why did you choose to go at it with the people you did?
Fahri Diner: The founding team consists of four people. I helped put this band together. It’s myself and three others, and two of the founders, Adam and Sri were with me at Qtera. They were not the founders of Qtera, but I’ve known them for a long time. When I called them up – this is an interesting story, particularly with Adam. He was a very, very smart product guy. He was a young guy back in the Qtera days like all of us. When I called him, he was living in Texas. I said, “Adam, I’m doing this startup. I think you could be a key part of this. He said, “Okay.” He didn’t even ask me on day one what it is that I wanted to do. I said, “We’ll talk about it.” He quickly made a decision. So, two of the three founders are people that I’ve known and gone through the battlegrounds. When you’ve gone through tough times, and you’ve gone through all of this before, it sets a different dynamic on your next venture, I believe. Then, one of the other founders was someone that I have a tremendous respect for in the industry, in general, on software and wireless. We were able to all get together and discuss these crazy ideas. One thing led to another, and the company was formed at the end of ’14.
Alejandro: Very cool. Fehri, what an amazing story of getting the band back and people that you’ve been able to build trust and being at it again with them. What is the business model of Plume for the people that are listening to really understand?
Fahri Diner: We are in the smart home space. Let me give you a perspective on that one going back to my communication days. Back during Pirelli and Siemen’s days, the need of the consumer, you and I, was basically connectivity at home. We’re talking about residential environment. We just wanted to get connected. There were DSL lines. There was even dial-up back then. The act was just to be productive. Then the industry moved into a phase where our types got bigger and faster, and that was driven by entertainment, social, more video channels, wireless, setup boxes, and your Netflix’s and Hulu’s and so on. Now, we’re in this phase, Alejandro, where the need of the consumer is driven by personalization. A consumer wants cross-device experiences. You want your lights and various things to talk to each other. You want your WIFI to be awesome. You want your speakers, yadda, yadda. You want to be able to create these experiences. Smart home is the category that we’re in, and that is the business of Plume. We curate smart home services. We started with WIFI for ampule controls, AI-based security, like securing your cameras, and so on. We have a motion-type solution. So this is the next big play for our constituents who are internet service providers. Our business model is to curate these services. They’re all done from the cloud. We’re a cloud subscription company who sells a platform to internet service providers like Comcast and Charter and Virgin Media, etc., who offer us now these services inside the home.
Alejandro: Very nice. Talking about Comcast, even Comcast is an investor. How much capital have you guys raised to date?
Fahri Diner: I think we reached about 150 million dollars. We raised a round back in January. It was the most recent round. The company is growing quite fast, and we’re growing 100% year over year. It’s a very high margin, software, Cloud subscription business, and we want to continue to do that. Comcast is not only an investor but a very significant customer. Charter Communications is the second largest size ISP in the U.S. also [35:10]. We’re also very active in Europe, and we recently started deployments in Japan. Our business model will continue. We want to enable these service providers to give us in-home services. I’m not just talking about connectivity and broadband to the home, but rather services in the home. Plume is currently a lot of these Tier 1 operators in North America and Europe use us to deliver and manage and support those kinds of services.
Alejandro: Now, you are changing your investor hat for your founder hat with Plume. You have raised money from several investors. You just alluded to them and significant ones: Spire, Samsung, Qualcomm. Pretty interesting folks that you’ve been able to put together. Especially after coming now from the investor side to the founder side and doing the capital raising efforts, why did you decide to choose to go with these investors?
Fahri Diner: I took a different approach in this company in that our customer base, these internet service providers are actually quite difficult for many startups to do business with. Think about your cable company. They used to be just your cable company provided your TV only, but they were your only option. Your telephone company was the only one. So, these guys have a very monopolistic DNA. They grew up in this environment. There are a lot of customers that are loyal to that because they have to be loyal to that. As a result, the way they approach their suppliers and partners or vendors they like to call them is very much top-down. They squeeze you in every angle because they have that DNA in the power. So, one way for us to work with them, we had kind of an unfair advantage by way of my background and all of the founders having worked and had relationships with these types of people. We had enough scars, I believe, to know how to cut deals without giving everything away. One angle that I found to be effective is to get them to put a little bit of skin in the game. We are at Plume, for example, addressing a core need for them. We’re not some adjacent technology. If Plume doesn’t work, their broadband is down. If your WIFI doesn’t work at home, the consumer calls them up and says, “My internet doesn’t work.” So, we’re mission-critical. One approach, I believe, is quite effective in a lot of entrepreneurship. Consider this: bring your customers under the tent. They should put their money – a lot of these companies are not only helping us, and they know this, so the way I presented is not an ask, but “Can you please.” Let me start it a bit – Comcast or Liberty Global or Charter, the conversation did not start with “Will you invest in Plume.” The conversation always started with, “Will you buy my product and technology and platform?” That’s what we said. That’s the number one intent in the initiative we had. Once we decided that we’re going to do something, investment is presented to our customers as a privilege rather than an ask. On the side, of course, we know when you’re in the early stages, it’s really an ask, but you don’t approach that way. I think it’s good, too, when you have these deals – of course, it works. I think they’re part of us, and our success is theirs. It worked for me. It worked in our space because these ISPs are not easy to deal with. So, there are other industries. There are other industries where the entrepreneurs might find this type of approach valuable, particularly when you have a very large, very powerful customer base. If you’re in a space where you have thousands and thousands of many customers in the consumer space, it’s probably a different story. But in this B2B environment where you have, not thousands, but hundreds of customers, they’re writing you very large checks on an annual basis. I think this approach, at least for us, it’s working.
Alejandro: Got it. How big is Plume today? Anything that you can tell us about employees, or anything else to get an understanding for the folks that are listening of the size of the business?
Fahri Diner: Sure. We have about 210 or so employees today. Sixty percent of our people are in Silicon Valley, Palo Alto. We also have an operation in Slovenia and Ljubljana, as well as in Poland. We have a commercial office in Zurich, and we have a small team in Taiwan, as well – an international organization. A lot of our data scientists and AI work, and all of that happens in Silicon Valley. We have an awesome team, as I mentioned, in Europe, Slovenia and Poland, we do a lot of device-level software. We’ve also taken an open-source approach, so that is something that I’m very supportive of. We provide some of our software for free to the device ecosystem to help us scale. I can’t disclose numbers in terms of revenue and all of that, other than to say it’s a high-gross margin business. I’ve been growing 100% year over year, and I think we’ll be going to space in two to three years. We’ll be certainly big enough to be a public company if everything goes well. In terms of our scale, our north star metric is the number of connected devices we see in our Cloud network, and those connected devices are your iPhone and your laptop, and the devices that we’re speaking over right now. We’ve just passed 750 million devices, so we’re approaching a billion devices, and I think that’s going to keep going. So, that gives us a tremendous amount of knowledge and forms the foundation of our advantage and strength moving forward. And we’re in 16 million or so homes, already deployed. So, there are a billion households out there that’s a target market. So, we’re barely scratching the surface, and already, it’s a substantial business.
Alejandro: What a journey, Fahri. There’s one question that I always ask the guests that come on the show, and I want you to ask this same question because, with your background and the quite impressive track record that you have, I’m really interested to see what’s going to be your answer here. If you had the opportunity to go back in time and have a chat with your younger self, with that younger Fahri that was thinking about starting a business, what would be that one piece of business advice before launching a business that you would give to yourself if you could go back in time, especially knowing what you know now?
Fahri Diner: Again, my experiences continue to be impatient, and to have unreasonable expectations is the way I would approach it, Alejandro. This Now Standard Time Zone, and frankly, I have a very recent experience on this as well. We just closed a fairly significant financing at the end of January. We had signed term sheets and all of that. There were a lot of reasons as to why I could have just pushed it out a little bit. Some investors were saying, “We need more time, yadda, yadda.” I basically said, “Look. January 31st, the round is closing. You’re in, or you’re out.” Had we waited another month, it could have been a different story given the current environment we’re in, so I think this kind of prejudice or action and just make decisions quickly; take two steps forward and one step back and do that at a fast cadence. I think, at least in my experience, that has served me better than trying to not make a mistake. Mistakes are okay. Obviously, you don’t want to make the same mistake two or three times, but the key there, though, is when you’re moving fast, you’re probably going to make more mistakes, but when it becomes apparent that the decision was a mistake, you have to admit it, maybe drink a glass of wine, laugh about it, and move on rather than sticking to it. That’s when people get into a lot of trouble. They’re protecting the decisions that are apparent are not the right thing to do, and you want to focus on the right constraints. That’s another one that’s been clear in my experience, particularly in the startup world, Alejandro. A startup says, “This is what we should be doing. There’s a decision point.” But they say, “We don’t have the money. We don’t have the people.” They end up doing what they can. Then there’s another decision point six months down the road. They don’t do what they should. They do what they can. If the constraint was to go raise money – if you didn’t have the money, go get the money and focus on that. Solving the right problem is very important because otherwise, you’re off 10 degrees, and when you’re off another 10 degrees, another 10 degrees, before you know it, you’re supposed to be going north, but you’re actually heading east. That’s when startups lose it, so you’ve got to solve – this is what we often talk about in our current team at Plume. Solve the right problem; address the right constraints, rather than the constraint that you can address.
Alejandro: I love it. So, Fahri, for the people that are listening, what is the best way for them to reach out and say hi?
Fahri Diner: I am reachable on LinkedIn. I think that’s probably the best way to reach out to me. Send me a message through LinkedIn, and we go from there.
Alejandro: Amazing. Well, Fahri, thank you so much for being on the DealMakers show today.
Fahri Diner: Thank you, Alejandro. It was a pleasure.
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