Mohit Aron On Building A $6 Billion Business And Raising $400 Million For His Next Company

Mohit Aron was an early employee at Google. He is a serial entrepreneur and previously co-founder of Nutanix which is worth more than $6 billion today. Nutanix is a virtualized data center platform that provides disruptive datacenter infrastructure solutions for implementing enterprise-class. He is currently the co-founder and CEO of Cohesity which delivers the industry’s first hyperconverged secondary storage for backup, test/dev, file services, and analytic datasets. He has raised for Cohesity over $400 million from investors like Sequoia, Accel, Battery, Google Ventures, Foundation Capital, Trinity Ventures, Qualcomm, or SoftBank to name a few.

In this episode you will learn:

• Building wealth by working for a rocket ship
• Lessons learned from being an early employee at Google
• Brainstorming for killer ideas
• Competing against the big players
• Listening to your gut feeling for important decisions
• Building billion dollar companies
• Defining success and how to achieve it

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About Mohit Aron:

Dr. Mohit Aron is Founder & CEO of Cohesity Inc.

He was also the Co-Founder and Chief Technology Officer of Nutanix. Dr. Aron brings over 15 years of experience in building scalable, high-performance distributed systems. Prior to founding Nutanix, Dr. Aron was a lead architect at Aster Data, where he made important contributions to the design and architecture of the Aster nCluster product line.

Previously, he was at Google, leading the design and development of Google File System (GFS), the software that manages data on Google’s large-scale clusters.

Dr. Aron holds a PhD in Computer Science from Rice University with a focus on distributed systems and a Bachelor of Science in Computer Science from the Indian Institute of Technology (IIT), Delhi.

 

Connect with Mohit Aron:

• Website
• Linkedin
• Twitter

 

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello, everyone, and welcome to the DealMakers show. I always love to have serial entrepreneurs, people that have been there and have done that multiple times. I think that today we have someone that is really going to share with us a ton of lessons that were learned along the way. So, without further ado, Mohit Aron, welcome aboard today to the show.

Mohit Aron: Thank you, Alejandro. Glad to be here.

Alejandro: How was life for you growing up in India, Mohit?

Mohit Aron: I believe life is always about learning. Right? Everywhere you are, it’s a learning experience. So, I spent about 22 years of my life growing up in India. It was a great learning experience, and I came to the U.S. when I was 22 years old. I came to Houston, and I guess I’ve been learning ever since too.

Alejandro: And you came to the U.S. for studies. Is that right?

Mohit Aron: That is correct. I did my PhD from Rice University in Houston, Texas. So, I came there first in 1995 and I spent five years there. Then moved on to the Silicon Valley.

Alejandro: How big was the cultural shock for you because there’s probably a lot of founders that are listening that are outside of the U.S. and thinking about coming to the U.S. So, how big was that cultural shock for you?

Mohit Aron: You know, I’ve been through two cultural shocks. One was when I moved from India to the U.S., and I found that was it. But when I moved from Houston to the Silicon Valley, that was a second cultural shock. So, moving from India to the U.S., I think it was obviously a big change. Everything was different. Everything was upside-down. In India, we turn the light switches downwards is on, and in the U.S., it’s up is on. So, everything was flipped and so many different cultures. It was just amazing. Then I thought that was it. Now, I’m in the U.S. so how surprised can I be. When I moved from Houston to the Silicon Valley, oh my gosh, that was another cultural shock because the way people think in the Silicon Valley, and it’s very different. This place is just phenomenal. This place has a lot of entrepreneurs. They all think different things. Houston, itself, was great, but that was more the Texan lifestyle. Those guys are all about having fun and enjoying life. They’re not as entrepreneurial, but I had a great time at Rice University and learned a lot. Like I said, life is all about learning.

Alejandro: Yeah. Absolutely. So, you actually started at Google in 2003. This was actually one year before its IPO? So, it was just about 600 employees. How did you come across Google?

Mohit Aron: The funny story is that when I was finishing up my PhD at Rice University, I was approached by an early engineer at Google who I had overlapped with in one of my summer internships, and he said, “You’re doing great stuff in your research. We would like to have you at Google.” At the time, I wasn’t ready to graduate with my PhD, so I said maybe after six months and asked him to help with my research, and he did. But six months later I didn’t even have time to interview at Google, and Google was one of ten search-engine companies. So, he reached out to me again two years later. “Hey, at least come have lunch at Google.” I did, and that’s when he showed me all the cool stuff. I mean, it was Gmail in the wraps, news.google.com in the wraps. Google Print under wraps, and a variety of Google technologies. I was sold. You know who this guy was? This guy was Jeff Dean. He’s the fellow at Google. He’s the brains behind Google Brain, Map Reviews, and a bunch of other technologies. So, he’s the guy who brought me into Google.

Alejandro: Wow. Really cool. So, what were you doing at Google?

Mohit Aron: For the most of my stay at Google, I spent nearly five years there. I was working on the Google File System. So, any data that the world stores, it eventually touches the Google File System. It was arguably the first Web-scale File System that was built in the world. It manages all of Google’s data, so that if the data comes through Gmail, or YouTube, or any of the other Google properties, it touches some of that cord somewhere. I was part of a small team of about five to seven people who were in charge of building that file system for Google.

Alejandro: Right. Five years there is quite a bit of time, especially when Google is quite a rocket ship. What kind of learnings did you get from those five years at Google?

Mohit Aron: A lot of learning. But a few that I can talk about is a) I learned how to think big, and I learned how to think differently. Google operated at a scale that no other company had the time operated at. They were breaking all sorts of computer science algorithms. The traditional storage was not enough for them. They needed something RPE scale, so you keep on adding nodes. The storage keeps on scaling and growing. They wondered in such a large cluster if something fails, they wanted to [inaudible 5:24]. So, think differently, and think big. That’s what I learned there. And of course, working with a lot of smart people. It was just an amazing experience; amazing learning.

Alejandro: Wow. You obviously were one of the early employees there. By early, even though it was 600, people were still getting compensated with stock options. What was the strike price of your stock options?

Mohit Aron: Oh, man, I’m going to tell you a story there. I accepted the offer in Google around October 2002, but then went to India to get engaged and spent about two to three months there. I came back engaged, and during that time, the strike price grew by a factor of 4. So, I could have gotten the stock at I think 50 cents apiece, but I ended up getting it at $2 apiece. I told my wife that was a very expensive engagement.

Alejandro: That’s amazing. Look, compared to where the stock is today, which is about $1,200, I mean, unbelievable ride. But I think that for you in your case, I think I heard somewhere that you sold earlier because you didn’t want to lose sleep over it. Is that right?

Mohit Aron: Yeah. Look, money is money, but I believe that the quality of life is very important. There was a time in the 2008 crash where everything was falling down. I knew Google was strong, but this was my first company. I’m like, “There’s plenty of life left to make money. I don’t want to keep all my eggs in one basket.” So, at that time, I thought I should just sell and not lose sleep over the crashing stock market. I think at the time, it was the right decision. Of course, in hindsight, you regret it. “Oh, I should have held the stock.” But I think sleep is more important to me, and I give that advice to any of the entrepreneurs who are listening that sleep well. It’s the more important thing for you because there’s plenty of life left to do great things. There’s plenty of life left to make money. Don’t lose sleep over money. That’s the advice that I followed for myself.

Alejandro: I love it. There are a lot of people that are talking about that, and also just sleep. There are people that are talking about the—I think it was Alexis Ohanian that was talking about “now that the hustle porn…” he was saying which basically is that being two weeks like nonstop with the Ramen noodles and everything, that you just need to take care of yourself. If you don’t do that, then—just close the lights out and go and do something else because you just have one body; one way to live. Right?

Mohit Aron: Yeah, and you know, the great thing about technology is that it grows so fast and if you want to keep up with it, you will also take care of your body. You’ve got to give the body the basics that it needs. It needs sleep. It needs good food. It needs exercise. So, to all the entrepreneurs who have dreams of doing great companies, I would say it stops with yourself first. Take it on yourself because then your body will return the goodness that you need to build great companies.

Alejandro: Yeah, absolutely. So, Mohit, in your case, at what point do you decide it’s time to move on from Google and really become an entrepreneur?

Mohit Aron: In my mind, life is all about learning. Life is also, in my mind, a little bit about keeping yourself uncomfortable. Whenever I get too comfortable, I know that in order to grow, I need to move to a different situation so that I can become uncomfortable again. At Google, I just became too comfortable. Everything was taken care of: lunch, meals. It was just way too comfortable. I knew to grow further I should now look into a different environment. So, I literally went off from Google and joined a young startup to learn the ropes of doing a startup. It was a data warehouse and company called Aster Data Systems. I kid you not. My wife and my parents thought I was out of my mind leaving a great place like Google going to a no-name startup. But they had faith in my decision, and I was there for two years. I literally learned the ropes of how to do companies because I was literally starting from square one. That taught me basically how to do companies, how to think afresh. Once I spent two years there, I thought I was ready to do my first company, which is when I did Nutanix which was my first company. Then a few years later, I did Cohesity which is my second company.

Alejandro: We’ll get that in just a little bit. Let’s talk about Nutanix. How did you meet your co-founders?

Mohit Aron: One of my co-founders was actually, he and I were engineers together in my very first company, the company I joined before I started at Google. It was a company called Zambeel. Nobody probably knows that name because that company doesn’t exist, but we were both engineers there, young engineers, and that’s how we knew each other. We coincidentally ended up again in the same company after I left Google, the company I mentioned, Aster Data Systems. So, he was the VP of Engineering. I was the main architect. That was one of my co-founders. The other co-founder was another employee of Aster Data Systems who knew my first co-founder from the past. Since I met both of my co-founders in Aster Data Systems, and we together decide to do Nutanix.

Alejandro: Got it. So, what was the process of this idea coming to life?

Mohit Aron: Do you mean the Nutanix idea?

Alejandro: Correct. Nutanix.

Mohit Aron: I think for a while, we kept talking maybe once a week, but we realized it’s not working out because doing companies is not easy. Coming up with different ideas is not easy. We all decided that we needed to quit our jobs and literally take a small place, rent a small place, and then think. So, that process lasted about two to three months. In that process, literally I made it an office-going-like atmosphere. I would leave home around 9:00 am and come back around 7:00 pm, and from 9:00 am to 7:00 pm all we were doing there is brainstorming and studying the markets and stuff. As part of that, we found that there was a gap in a particular part of industry, and we thought that we could provide a solution that is a great solution for that gap. That’s how my company Nutanix was born.

Alejandro: Obviously, of this company, you were the CTO, the Chief Technology Officer. So, how did you guys decide to divide the roles?

Mohit Aron: I think I was the technical guy, so it was natural for me to be the CTO. The first co-founder I mentioned, his name is Dheeraj. He was the VP of engineering at the company we came from, Aster Data Systems. So, naturally, he took on the CEO role. The third co-founder, he was the product guy at that company. He because the chief product officer. It was natural extension to what we were already doing. I was the technologist, so I became the CTO.

Alejandro: Got it. What ended up being the business model behind Nutanix?

Mohit Aron: The business model was—I think the easiest way to describe that is in the last—Nutanix was founded in 2009. In the decade before that, CPU, disk speeds, and capacities had increased tremendously. But what connects the two? Networking had not increased appreciably. So, our whole idea was to collapse all three of them together into one platform. We called that hyper-convergence. Removed three tiers off hardware and put it all on one platform. Then started running production applications on that. That was, in essence, what Nutanix was all about. Actually, the genesis of the story, not many people know this actually, comes from an intuition that I got at Google itself. So, the story is, I told you I was working on the Google File System and it was a Web-scale File System. So, Google built this beautiful file system but it tried to use it like traditional storage, so it would put compute on one side of the network, the Google File System on the other side, connect that using some extensive networking, and boom. You have Google doing its stuff. Google very soon realized that it was spending most of its money and time trying to improve the network. That’s when they came up with the idea that why don’t we collapse all three together. So, they made a fancy schedule called board where they put all of their compute and the Google File System processes on the same node and manage it all using that fancy scheduler. That’s what gave me the idea: that solution applied to Google. It’s probably not a solution that’s applicable to the world out there. How can we bring it to the world because in the real world, compute and storage don’t trust each other?

Alejandro: Yeah.

Mohit Aron: And the way we made that possible was through virtualization. So, we basically made a logical boundary between compute and storage and brought it together in one platform through virtualization. I know that’s a lot of geeky stuff, but that in essence is the story behind Nutanix.

Alejandro: I’m sure that there’s going to be a lot of geeky people as well listening to this, so I’m sure they appreciated that. So, thank you, Mohit. Let me ask you this. With Nutanix, you were literally taking the food off the table from giants such as Cisco, Hewlett Packard, which also bought one of your rivals. What were some of the early days like with Nutanix?

Mohit Aron: The early days, a) we were doing a company for the first time, so we didn’t know much about doing companies. The one thing I knew was that we got to be frugal and we didn’t have money. Basically, three or four engineers, we wrote practically the whole of the Nutanix code that we eventually went GA. GA means general announcement. Over a period of one-and-a-half years we were all heads down coding. I also remember that anyone was willing to do anything else in the company. One of my co-founders was willing to become the finance guy, and he can get up all the bills and stuff. The other guy used to take it off rent and stuff. So, we were literally whatever was needed, we used to roll up our sleeves and do that. The first few years we were all heads down and just coding, coding, coding, and testing, testing, testing. Once the product was built, slowly it dawned on us that we actually had built something phenomenal because the uptake was pretty impressive. I think the history speaks for itself after that. Nutanix took off and became a public company and so on and so forth.

Alejandro: Talking about building something exceptional and talking about taking off, was there a point for you where you were like, “We are into something here.”?

Mohit Aron: Yeah. When you start seeing the adoption, even though your product is a little bit unpolished, but people are standing up there and saying, “This is the philosophy I subscribed to. We’re not going to buy that other mature product because we don’t believe in that philosophy anymore. We don’t believe in the philosophy that compute, storage, and networking all need to be separate. Three different things brought from three different vendors. We believe in the Nutranix philosophy, and we believe this company can actually surpass whatever think we have in the product.” That’s when you know that you are onto something big. That people are willing to forego those big names and those polished names and are willing to come to you even though you have no name and they believe in your technology and your vision. That’s when you know something big is going to happen here.

Alejandro: That’s it. Product/market fit. So, an operation like this obviously requires quite a bit of capital to scale. How much did you guys raise in total for the business before the IPO?

Mohit Aron: I don’t have the number off the top of my head. I think Series A was about 10 million dollars. Series B was about 20 or so. Series C was 25. Series D was 100. So, all in all, I think we may have raised upwards to 200 million dollars in four or five rounds before the company went IPO. Now, I started Cohesity well before it went IPO because I thought there was another big problem waiting for me to solve.

Alejandro: We’ll talk about that, Mohit. Don’t get ahead of ourselves here. So, obviously here on the business, you had people like Khosla, Lightspeed, Battery. Do you recall who opened the doors to meet these guys?

Mohit Aron: What happened was that we first raised money from a small firm called Blumberg Capital, off in San Francisco. The guy who seeded us from there, then moved to Lightspeed. He then convinced Lightspeed that this is a great team and a great technology to look at. So, Lightspeed came knocking, and they liked us so much that they didn’t even give us a chance to take our pitch to other VCs. They just funded us with our Series A financing. Then beyond that, we took on an independent board member. His name is Mark Leslie. He was the CEO of Veritas in earlier days. Great guy, and he’s the guy who really introduced us to Khosla Ventures because he had good relations with them. That’s how we came in touch with them at Series B time and we eventually raised Series B from Khosla Ventures.

Alejandro: Got it. Obviously, that guy that went from one VC to another and got two VCs to invest in your business, I hope that you guys invited him for dinner.

Mohit Aron: Yeah, we put him on our boat and—

Alejandro: Amazing. So, Nutanix actually became like the poster child for tech unicorns, not like the companies that reached a billion-dollar evaluation. You left right before the IPO. We’re talking about a company that went even to the 4 billion evaluation or even more, but why did you decide to leave the business when the company was taking off?

Mohit Aron: I’m a technologist and let’s draw an analogy to an iceberg. Compare an iceberg to a data center. In the data center, we have production stuff. We call that primary storage. That’s what Nutanix does. But while I was at Nutanix, I realized that there’s even a bigger problem in the lower part of the iceberg which we second restorage. It’s everything that’s non-mission critical, everything that’s non-[ 20:41] driven like backups, and test and development, and analytics, and so on. So, I realize that only 20% of the data sits in primary storage which is what Nutanix was addressing, but 80% sits in secondary. There’s a big mess in the secondary part. We call that [inaudible 20:59] fragmentation. Every part of data is all over the place. It’s in a different silo. It’s in a different appliance. Even in the cloud, it’s in a different bucket or what have you. So, I thought that rather than upsetting Nutanix and milking the cow so to speak because at that time, the technology was mature, and it was just a matter of pushing the go to market. Let me go out there and start a company. Remember that phrase about being uncomfortable again?

Alejandro: Yes.

Mohit Aron: So, I came out of Nutanix. I started Cohesity and that was all about [stacking 21:32] and restorage. I had realized the magnitude of the problem I had taken on. It’s a very big market, very big problem. It doesn’t deal with just one silo like backups, it deals with multiple of them. So, the innovation required here is phenomenal. That’s what we’ve been working on for the last five and a half years.

Alejandro: What was the process like because this is a really big deal, so it’s literally like leaving your baby, your company. What’s the process like of coming to life, you incubating this concept, and then one day saying, “It’s time for me to leave.”?

Mohit Aron: Obviously, it’s always hard leaving your baby, but I had the same problem at Google. It was incredibly hard to leave Google given the nice place it was. But I guess once I decide on something, then the decision is made. It was fun to start all over again. There were a bunch of people who were working with me trying to explore the nooks and corners of what we were trying to set out to do. We sat in an office for about five to six months, and we really defined what we wanted to do. I actually am a big fan of not—and this is advice for entrepreneurs. Don’t just start with what you think is the right thing to do. Just take a step back, divide up the market into multiple pieces, and study what others have done in various segments of the market. So, I divided up the market into virtualization, security, mobile space, and so on. I studied all the companies that were done, and that gave me ideas on what the gaps might be. Eventually, I thought that the right thing to do is to focus on that secondary part, but it gave me ideas from other spaces. It gave me ideas from what people were doing in security space. It gave me what are the trends? So, now, I was a much more informed person along with the rest of my team, and when I started this company, I knew the lay of the land. I knew what people wanted. So, the product was really architected with all that in mind. That’s the reason for all the success we’ve had in the last five and a half years.

Alejandro: We’re going to talk about that. I know that tech companies keep everything that is ready like their IP, like very tight to the vest, and especially being a co-founder and CTO, the one that is leaving. So, I guess from your experience and then also for the people that are listening, how can you prepare or avoid any IP issue if you decide to do this approach that you took?

Mohit Aron: What I like to do is, in the beginning, you don’t have a company. So, you’re working with a bunch of people trying to brainstorm ideas. The risk always is that you’re based on an idea, someone doesn’t join you, you do a successful company on that, but later that person comes and says, “I can own this idea.” So, that’s the risk that people run. To get around that risk, with the help of an attorney, I prepared some paperwork and that paperwork essentially said that whatever idea was discussed under the roof that I had rented, they belong to me. Now, if we come up with three ideas, and I do a company on one of them, and some guy doesn’t choose to join me but they choose to do a company on the second idea, it is on my honor to not go and pursue that person and claim that that was my idea. They have to believe that. If they don’t believe that, then don’t work with me. Don’t brainstorm with me. So, but the ideas, that’s how I protect myself and this company. We had that cadence going on that everyone who was brainstorming with me under one roof had signed something that said that any ideas invented here would belong to me in some sense.

Alejandro: Got it. Of course, in Cohesity, you were a solo founder. So, this was a different experience for you, like being used to being with other people that you could rely on the good days and the bad days. What has been the difference between having co-founders to being a solo founder?

Mohit Aron: A co-founder is a very intense relationship. I sometimes say it’s even more than your marriage because you spend eight to ten hours with your family at home, but you spend more hours with your co-founders. The intensity is pretty high. But the nice thing is that you can rely on your co-founders for a number of things. For instance, in Nutanix, I was the technical guy, and I let my other co-founders take care of the business aspects and stuff. So being the only founder comes with its upsides and downsides. On one hand, there is no one to have such an intense relationship with. On the other hand, everything is the buck stops with you. Any problem in the company eventually comes to you if your subordinates can’t solve that problem. So, it’s big, big responsibility. My advice to entrepreneurs out there is not to try this in the first company. I think I would recommend two to three co-founders to begin with, but once they know, they get the hang of things and they know that they have at least a good idea of what it takes to build a company. Then in their second or third attempt, they can attempt to go solo, but not in the first one.

Alejandro: Got it. Makes sense. You being a trained engineer, Mohit, what was the experience for you from going from the engineering side to the business side?

Mohit Aron: Oh, man. There was a lot of learning that was required. I must humbly state that there was some delusion. You do a successful company like Nutanix, you also become delusional. “Oh, you know how to do startups. Right?” But the reality is that you don’t. Every company, the situation is different, and I was in a different situation. I was the only founder, and I had to do both business and technology. So, let me give you some examples of failings that I had in the initial years of the company. Let’s say I want to hire technical people. It’s very easy to hire technical people. I know how to hire technical people. Ask them some puzzles on the whiteboard and they’ll give answers, and you can “Okay. This guy seems like a great guy. Let’s hire him.” But you can’t quite do that for business guys. I mistakenly thought I could just replicate the exact same process. Just ask them some questions, and if I’m happy with the answers, then boom. There’s a guy I can hire. But these are not programming puzzles. The person could have heard that stuff or seen that stuff elsewhere and he’s just regurgitating. How do you really know that he or she knows that stuff? So, I refined my algorithm for hiring business people sort of the hard way. I made a lot of hiring mistakes. If you want, we can elaborate that, but that was just one of the failings: me thinking that I actually know how to hire people and I didn’t. I had to learn it the hard way all over again. There were enough other learnings that I had to manage VCs and managing the board, and hiring great board members, and that sort of stuff. There’s plenty of learnings. Lots and lots of great learnings. I’m just amazed at how much I didn’t know even when I thought I knew a lot.

Alejandro: Right. Well, you don’t know what you don’t know as the saying goes. Right?

Mohit Aron: Exactly.

Alejandro: So, what ended up being the business model for Cohesity?

Mohit Aron: By simplifying just backups. I’m a big fan of doing companies with a very well-defined entry point in the market, which solves some key pain points. But then, the company ought to have a bigger vision that you can expand to beyond the entry point. The entry point for us was just simplifying backups. So, the pain that was there was people had to go to three or four different vendors to put together a backup platform. One vendor to buy backup software from, another to buy storage from, and so forth. Once we do that, once we simplify backups, now we go to the rest of the vision which is basically solving this massive fragmentation problem in the secondary restorage world. Beyond backups, test and development is brought from a different vendor. Analytics from a different one. Five services and object storage from a different one. Cloud is one more vendor to go in. So, the essence behind Cohesity was to build one platform on which you can consolidate all of that. I sometimes liken that to a smartphone. A smartphone had to be a great phone to begin with. Even in the phone, it brought lots of innovation. But beyond the phone, it can also be a music player, a camera, a flashlight, and so on and so forth. On one platform, you’ve consolidated multiple things. That’s, in essence, what Cohesity does for the data center and the cloud.

Alejandro: For Cohesity, how much capital have you guys raised?

Mohit Aron: So far, we have raised 410 million dollars in total across four rounds of funding: A, B, C, and D. Our last round of funding was raised one year back. Our lead investor was SoftBank. So, very glad to have very, very strong investors with names like SoftBank and Sequoia and Google Ventures. Even Cisco and HP have put money in us. Morgan Stanley has put money in us. Excel has put money in us. Trinity Ventures, and lots of great venture capitalists have put money in us. But the lead investors are SoftBank and Sequoia.

Alejandro: Did you find that those were relationships from your time perhaps at Nutanix. How did you meet these guys?

Mohit Aron: Sequoia, the funny story is that my board member from Sequoia used to be my SVP of Engineering at Google. He’s a very accomplished figure. His name is Bill Corum. He used to also be the director of Bell Labs. It’s a research establishment before he came to Google. So, he left Google to go to Sequoia. I guess with Nutanix, we built a little bit of a reputation, so as soon as I was trying to do Cohesity, he approached me. I went and met Sequoia, and just a great team, and Sequoia is well-known to be the best early-stage VC out there in the world. So, as soon as I was ready, literally in two days, Sequoia wrote me a check and in three days, 15 million dollars in our Series A round of financing. That’s how I came to being in a formal relationship with Sequoia. Then in our Series D round which just happened last year, I met Deep Nishar who used to be an advisor to Cohesity earlier. He was also an advisor at my last company, Nutranix. So, he’s known me for a while. In fact, we overlapped at Google even though we didn’t know each other back then. So, early on in Cohesity, I signed him on as an advisor, and we used to take walks and stuff. Then he joined SoftBank, and we parted ways as an advisor because he was busy, and I was busy. But when we were about to raise Series D, he’s like, “I already know this company. This is a great company. I think SoftBank should invest in this company. So, this became the second enterprise software company that SoftBank invested in. The first one was Slake. That’s how I came to know those guys. Then I met the founder of SoftBank. He’s very picky about the companies he invests in. He personally wants to meet the people that he’s investing in. So, he happened to be here in California coincidentally for about half an hour to meet me. He was here for six hours, but he met me for half an hour within those six hours. I guess he approved, and that’s how we ended up in a formal relationship with SoftBank.

Alejandro: That’s amazing. You seem to be like an expert at identifying people that are going to be moving into other places. It’s amazing.

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Mohit Aron: I value relationships. I value people’s expertise. When you get around with elite people, you know that they’re going to do greater life. Wherever they are, they’re going to do great stuff. So, knowing great people and cultivating relationships with them and this is actually strong advice for would-be founders and entrepreneurs out there. Build your relationships because you don’t know when those relationships will become useful. Because if you build relationships and you move on with elite people, those elite people will help you in the future. You just don’t know how today. Right? So, look at Deep Nishar who connected me to SoftBank and funded us there. Look at Bill Corum who was my SVP of Engineering at Google, and now my board member from Sequoia. These kind of people, you just build a relationship and eventually and somewhere down the line they will be really, really helpful.

Alejandro: Absolutely. I guess some people might be wondering. At this point with Cohesity, you already have achieved financial freedom, enough for generations to be able to live well. Right? So, why did you raise capital and at what point did you think it was a good idea to open it up to outside investors rather than just financing it yourself?

Mohit Aron: I had actually achieved financial freedom in Google itself. So, for me doing companies is not about making money. It’s more about pushing my passion. That’s why I do companies. I think the best way to describe how a company is built is to maybe liken it to let’s say a hotel. When I want to build a hotel, let’s say I’m not rich and I can’t put in all the money for a hotel because I’m building a big hotel, and I don’t have that much money. So, what you do is you go raise outside financing, but let’s say you need 500 million dollars to build the hotel. You’re not going to get all that in Day 1. Maybe you’ll get like 20 million dollars. Then you go and build part of the hotel. So, you show progress. That gives confidence to the VCs out there that given that you seem to know what you’re doing, they will fund you more. Then you fund more. Then maybe part of the hotel is made, and you even make it operational, start making some money, and they’re like, “Okay. Maybe we can actually put more on top. Maybe build more floors.” So, they’ll give you more money. This is how it’s built. One of the big advantages of actually taking money from external people is because when you put your own money, you can maybe become a little bit lax or easy-going. This is your money. Right? But it belongs to someone else, there is a sense of responsibility that you owe that person. That person took a bet on you. You can’t let them down. So, that is a strong motivator. That’s another reason why we raised money. So, it’s not just because—sometimes these ventures require a lot of money, but also because having an external investor keeps you a) honest and motivated, and b) they bring value. Look at Sequoia. They brought me huge names. One of my independent board members is Daniel Warmenhoven. He was brought to us by Sequoia. He was the CEO of NetApp. Great guy. I view him as my mentor. So, I get to build more relationships. I get to know more great people through these relationships. If I had only put my money in it, a) I won’t have enough, b) I won’t build all these relationships. The company’s not all about just holding money by yourself. It’s about sharing, and bringing in people, and forming partnerships, and forming an ecosystem that the company lives in, and that’s what is so great about doing companies.

Alejandro: Got it. It makes sense. How many employees do you have now at Cohesity?

Mohit Aron: The funny thing is that two weeks back we crossed the 1,000 mark.

Alejandro: Wow.

Mohit Aron: Today, we had a company all hands and we celebrated that. So, we have more than 1,000 employees at Cohesity. So, it’s a great step for us.

Alejandro: That’s amazing. Congratulations. I’ve heard you talk a lot about hiring leaders. How do you hire leaders?

Mohit Aron: That goes back to what I said. I learned the hard way on how to hire leaders. The first thing you start with is you build—in my mind you can call it a checklist or a comprehensive best interviewing. You form a list of things that you’re looking for because different leaders bring different things at different stages of the company. You need to understand what your company needs at the stage that you’re in. So, you build a list of things that you are looking for in a leader, and you divide that list into three parts. One is the part that is applicable just by matching it to the resume of the person. Maybe you want the person coming from a startup. Maybe you want a person who has done zero to 200 billion dollars in revenue before, or something like that, whatever the list is. Then you have a list of candidates that meet your checklist or a pre-interview checklist. Then you go through an interview and you’re looking for specific things, and you’re asking specific questions. One thing, of course, you look for in an interviewer is that this leader is a great people-person and has a great culture fit. Once the person meets at least 80% of the checklist you have formed for the interview, then comes the post-interview checklist which is all about, in my mind, blind-run references and not blind references from just any person. It’s references from either people who reported to that leader or people who’ve been peers of that leader because those are the guys who tell you the truth. They will tell you any red flags. Between this, I’m fairly certain between the process that I will land up with a great leader who’s a great fit for what the company needs at this stage.

Alejandro: I guess whether it is hiring or fundraising or doing any strategic decision that is going to determine the future of the company, there are many instances where you need to listen to your gut feeling. I’ve heard you talk about gut feeling. What advice would you give to folks that are listening about this?

Mohit Aron: Yeah. The advice I’ll give to people is that when you hire a wrong person, especially when that person is a wrong leader, that sets the company back at least six months if not more. The damage that’s done is immense. So, the body has a way to tell you if something bad is about to happen, and I would strongly commend to people to listen to their gut. If everything else is pointing in one way, but your gut is saying something else, I would say listen to your gut because if things go wrong, you would regret it and you would have to clean up for a long period of time. So, rather than go through that mess, just what’s the big deal. Don’t hire the leader, and go with your gut and look for the next guy. Conversely, sometimes the gut says that this is a great guy, and that’s where as long as he’s sort of met the checklists that I’ve put together, and it’s not a huge red flag there, then I would go with my gut, and I’ve been rewarded by taking bets on people. I’ve had people who were just kind of borderline from my checklist, but my gut said this was going to be a great employ. Look at their enthusiasm. Look at the person’s willingness to learn. I think if I just take a bet on this guy, I think I can mentor him and they will become incredibly valuable to the company. I’ve taken those bets and they have been very, very rewarding even to me personally because you see such a person grow and take the company forward. So, I think I’m just saying that pay attention to your gut. I think our body has a natural ability to warn you against red flags and also tell you if something might be very promising. Startups are all about risks, and how do you manage those risks? One way to manage the risk is through your gut. Your gut tells you which way to go.

Alejandro: Right. For you as well, Mohit, life is not about accumulating. It’s about giving. Could you expand on this?

Mohit Aron: Yeah. Eventually, like I said, I no longer do companies for money. I do it for my passion. But along the way, it’s also very gratifying to give some back. I always say knowledge is free. Knowledge should not be for sale. So, I freely distribute to anyone who comes to me for advice on how to do companies. That’s all free knowledge; all the things I’ve learned the hard way. People call me distribution expert, and I just enjoy giving lectures on distributive systems and tell people all the intricate details that I’ve learned over my 20 years between companies like Google, Nutranix, and Cohesity. Not that I’m going to reveal any trade secrets here, but the concepts, I’m more than willing to share those. That’s one part of giving. The other part of giving is just financially, I’ve given to charitable organizations. I have a structure set up that when me and my wife pass away, a bulk of our wealth is actually going to go into a charity. As a company, we give to a foundation here in San Jose that takes care of providing jobs to young people. I think it’s called the work2future Foundation. So, we believe in giving in a number of ways. I’ve given to my alma maters: Rice University where I did my PhD from and my Indian Institute of Technology in Delhi where I did my bachelors from. So, I’ve given to all of them. So, life is about giving, and I think giving things you pleasure. Accumulation, unlike what people believe, accumulation isn’t always very pleasing, but giving can be very fulfilling.

Alejandro: I love it. So, one question I always ask guests that participate on the show, Mohit, is if you could go back to the past and give yourself one piece of advice before launching a business, what would that be and why?

Mohit Aron: That’s hard to pick from, but I would say the first advice I would give me, myself, is to listen to my gut because whenever I’ve not listened to my gut, I’ve regretted that. The second thing if I may pick is the importance of hiring leaders and the right leaders. I already gave you my algorithm for hiring leaders. But to begin with, you need to put together a pipeline. I was very stingy, frugal when I did not put my own recruiters. Right now, I would tell any entrepreneur out there you will do yourself a favor if you’re raising significant amount of money from VCs, probably more than a million bucks, spend just $300,000 of that money on a great executive recruiter out there. It approximately takes about $100,000 per exec. Bring three great execs into your company. These executive recruiters will build a great pipeline for you to pick from, and then you can apply the algorithm I gave to you and pick a great leader because these great execs, these great leaders will be immensely useful in building the company. You hire bad leaders upfront, it’s going to set back the company a couple of years. So, that’s the advice I would give, and also apply to myself if I ever do another company. The first thing I’m going to do is take my first $300,000 and get three great leaders.

Alejandro: That’s fantastic. By the way, you’re actually the first one that shares this type of advice of getting this type of executives. So, thank you for sharing that. What is the best way, Mohit, for the folks that are listening to reach out and say hi?

Mohit Aron: They can just contact me on LinkedIn. They can search for my name Mohit Aron on LinkedIn and I’m more than happy to connect with them and respond there. They can also if they want, write me an email. My first or my last name Mohit or Aron @cohesity.com would work. Any way they’d like to contact me and I welcome to answer their questions.

Alejandro: Fantastic. Well, thank you so much for being on the DealMakers show today, Mohit. It was a pleasure.

Mohit Aron: Thank you, Alejandro.

 

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