Steve Tuck On Raising $80 Million To Disrupt Cloud Storage And Computing

In the fast-paced world of entrepreneurship, the journey from inception to success is often marked by unexpected twists and turns. Such is the story of Steve Tuck, whose path from corporate stability to the tumultuous startup landscape is a testament to resilience, vision, and unwavering determination.

Steve’s company, Oxide Computer Company, has attracted funding from top-tier investors like Counterpart Ventures, Intel Capital, Strike Capital Venture, and Eclipse Ventures.

In this episode, you will learn:

• Steve Tuck’s journey underscores the importance of resilience when navigating the unpredictable terrain of entrepreneurship.
• The birth of Oxide reflects Steve’s unwavering vision to revolutionize on-premises computing through integration and innovation.
• Steve’s experiences at Dell and Joyent provided invaluable insights into operational efficiency and the transformative power of technology.
• Through transparent communication, Steve and his team weathered the storm of financial upheaval, reaffirming trust and commitment.
• Steve’s transition from corporate stability to the startup landscape highlights the importance of embracing change and seizing new opportunities.
• The challenges faced at Joyent underscore the critical importance of achieving product-market fit before scaling operations.
• As Oxide continues its journey, Steve’s unwavering optimism and commitment to innovation remain essential driving forces for success.

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About Steve Tuck:

Steve Tuck, based in San Francisco, CA, US, is currently a Co-Founder and CEO at Oxide Computer Company, bringing experience from previous roles at Joyent.

Steve Tuck holds a 1995 – 1999 University of Wisconsin-Madison. With a robust skill set that includes Sales, Software, Marketing, Leadership, Process Improvement and more, Steve Tuck contributes valuable insights to the industry.

Connect with Steve Tuck:

• LinkedIn
• Crunchbase
• RocketReach
• Zoominfo

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So today. We have a very exciting story ahead of us. You know, quite inspiring. We’re going to be talking about changes in leadership how to deal with them. You know we’re going to be talking about the period of going through. You know the first customer the first shipment. Also raising you know a series as and you know in this case, you know our our founder has raised closed with his team. You know to 80000000 which is incredible but they they also they they dealt with some ah ups and downs especially with with with what happened with Silicon Valley you know and then also going through regulatory compliance which is not easy because as a startup as you know. You’re already dealing with the uncertainty of building a business so also dealing with their regulatory compliance is double the trouble. So again today. The conversation quite inspiring building scaling financing all of that good stuff that we like to hear so without water. Do let’s welcome our guest today Steve Tuck welcome to the show. Thanks.

Steve Tuck: Hey thank you very much for having me excited to be here if have enjoyed listening to the podcast over the last couple weeks.

Alejandro Cremades: So born in California Steve Yos I walked through memory lane. How was life growing up.

Steve Tuck: Sure? yeah, grew up in Piedmont little East Bay Community and had had grown up in a household where my folks had a small heating and air conditioning companies that. Was sort of the center of our universe growing up and summer jobs were spent lining plenums and bending metal and running service deliveries out to technicians that were doing furnace installs air conditioning installs and then had the very good fortune of. Being able to go to college and went to University Of Wisconsin spent 4 years there and then moved down to Austin Texas where I started at dell computer.

Alejandro Cremades: Now how was it like you know, being at the dell computer because I mean you got the chance there too of of being at a company like that for you know 9 years and I’m sure that during those years too I mean there’s like some really interesting growth tool. So how how was how was the experience of being Adele for you.

Steve Tuck: Um, it was great. It was kind of wild getting there because I I arrived in October ninety ninety nine and didn’t have the fullness of appreciation for just how high flying dell had been in the previous decade in in the 90 s. I think it was the highest growing stock on every exchange over the course of the decade. So I arrived in in kind of the the the fervor that was dell at the top of the personal computer industry and it was a bit surreal because you know they they had this. Incoming party for our class where they rained fake stock options down from the ceiling and they they played a a song we are deionaires showing a bunch of employees dancing on tables which was interesting. And so it was it. It was kind of a bit of a surreal in introduction into the the technology sector at the time but over the the next couple of years some pretty hard times because this is right when the bubble burst and you had a whole clear out of swaths of folks that were sort of at the top. And and then very quickly found themselves at the bottom and um and then some also really interesting technological transformations as you had the advent of companies like bmware where for the very first time the industry was moving from single application single server to putting.

Steve Tuck: 10 applications on the server one hundred applications on the server which just was not something one did previously and and had the good fortune of kind of going through that transition state at Dell and and a lot of transitions across industry. Thing that I really left there with the deepest appreciation for was just the manufacturing and operational and financial innovation that dell sometimes is not as well known for um, you know, direct from dell was a slogan that was well- known but it was it was really really fascinating kind of going into the factories and seeing. Ah, just how much thought and innovation went into the the cash conversion cycle and the efficiency that that Michael built around that operation.

Alejandro Cremades: Now 1 thing that is really amazing. You know that that I’ve been getting as part of your career and something that you really don’t see often is loyalty and in your case I mean before being an entrepreneur I mean you’ve been with two companies I mean one was Dale the other one was a joy and and and almost for like. Really like a decade on on on on each one of them. So what? What for example, you know, like pushed you to go to Joyent and and what were what what got you into those companies for so long. What was that future that you were living into.

04:46.95
Steve Tuck:
Yeah I appreciate you noting that and noting that with positivity because you you amazingly these days staying with a company for a long period of time is is not looked upon the way that it was I think. In the last couple of decades but um you know there was a period of time at dell I think I was 23 24 years old I was in a big all hands and I was I was you know looking across a sea of people at the stage where a couple of dell executives were up there giving a talk. And I just remember being so enamored with the culture and the product and the team and I I knew I was going to be a delta rest my career. My goal was I want to be on that stage in you know, 20 years I want to be moving on to different companies and doing different things and. Um, but as I as I got kind of deeper into my career dell a couple of things happened one was there was a new sector that was emerging this what you know at the time was was kind of called the web to dot o sector were these little technology companies Yahoo and Facebook and myspace and others. We’re growing very very rapidly and we’re demanding things of their technology providers that were maybe a little off the beaten path to me dell and hp and Ibm and others were building these kinds of swiss army knife systems that were good for any sector. Any user.

Steve Tuck: Um, which delivers operational efficiency and and kind of product ah focus. But for these hyper these kind of what would be the early hyperscaers. Um, it was a bit of ill fit and I was working with some of these companies and. They had been pushing for del to go in a little bit different direction to better cater to their needs and there was some resistance around that and and some trepidation around catering to to these markets and I think you know right in the same period where there was resistance to kind of. Moving and shifting a bit towards this market one of the providers in this market I had worked with them on a project and with Facebook where they were opening up their api for the first time Facebook had done all their development internally and Mark really wanted to open up the Apis. So third -party developers could create content on facebook. Pretty controversial decision at the time he pushed through they had this big developer platform launch and it was going to be sun microsystems facebook and this company join it this little cloud computing company. Ah and at the last minute sun was not able to ship in time. So I got a phone call at dell and and they said hey would you like dell you know dell has a very small window to slot in here and be the technology partner for this important facebook developer launch long story short we were able to get kit in their hands get approval and dell kind of swapped in for sun.

Steve Tuck: In this this pretty big launch that that sort of opened up the Facebook platform publicly and in in the midst of that I ended up working very closely with the founders at join it and began to get introduced to this new abstraction cloud computing that. They had you know, long believed and and had kind of imbued in me that was going to be the future of computing and those kind of combined forces was enough to dislodge me from dell and they had asked me to come over to join it and head up the go-to market efforts there in 2009 and that began. Yeah, the next the the next decade that would certainly have plenty of highs plenty of lows. But um, again, found myself in a company that I thought I would be at for a very very long time.

Alejandro Cremades: So Joe for example I mean I know that there you know you were also as as we’re mentioning you know for a decade and there was like quite a a bit of a turnover when it came to leadership. So what did you learn about you know, perhaps culture and. And leadership that perhaps you know you knew you were going to apply later on.

Steve Tuck: Um, yeah I think the a couple of things that that I was that that I got to to live through at joy in those first couple of years um the company fell into a trap that I think many many startups fall into and that is. Ah, raised a bunch of capital and and with kind of the the aid of investors we’re looking for growth and we’re we’re trying to grow quickly enough to deliver on the promise that that had been made around raising that capital. And the the biggest challenge that the company hit was that that growth that push into go to markete was pre product market fed and and it didn’t matter whether there was product market fed let alone what you’re really looking for is sales market fit. Um, began to scale the the the company in all markets internationally and build out these vast. Go-to-market engines in the hope of generating that demand. Um, and that can be very expensive that it was a very very very expensive lesson for the company. And and and required the company to then go retrench a couple of years later and recapitalize going forward. Um, and it certainly led to some turnover at the top of the company and and that happened you know more than once.

Steve Tuck: Going through that period of having to kind of repair from 1 classic mistake which is growth at any cost and I think just as an industry you saw that across the board when capital was cheap and a lot of money poured into the sbc asset class. In in kind of the tail end of the last decade and it was ah it was a hard lesson that we took into the formation of oxide which is making really really sure that before you start scaling up. Go-to-market efforts you’ve got. A firm understanding of the product that you built the market you built it for the the pain points that the product is solving for and that you are trying to there was there was a great a great quote from and a partner at a 16 who had said. You know you want to make sure that before you are adding that next salesperson you can see the lights of the customer’s eyes like they’re coming over the hill and they’re just about to take you over and that’s when you hire that kind of next person and you know I think we want to be I think we’ve been pretty mindful of investing ahead at oxide where we need to. But. Certainly the um, that’s an important kind of gas pedal clutch balance that is is critical to to keep in check when when building a company and and it was a tough lesson to join it.

Alejandro Cremades: So let’s talk about let’s talk about this um let’s talk about oxide um ah obviously you know like you were now for like 20 plus you know years almost you know, working for somebody else. You know doing the the 9 to 5 yeah, as we as we call it. You know in the in the startup world now. What triggered you know for you to be okay with the idea of venturing into the unknown because I mean that was um, a massive step. You know after you know, being for so long in corporate and working you know for another company I mean how was that you know for you that transition.

Steve Tuck: Um, yeah I mean so a couple of things led to this one was again bearing witness to some of the things that weren’t some of the things that didn’t work in in prior companies and really wishing that there was more change that we could have affected in in those companies and. Um, two was just recognizing a couple of of market factors in our kind of tenure at joint one was this rise of Cloud computing I mean if you if you look at a WS pre Twenty ten and it was less than $1000000000 business.

Steve Tuck: Right today. It’s a $100000000000 business it’s hard to find similar kinds of rises in industries anywhere over a decade plus period so cloud computing really emerging and and we had you know a core belief that cloud computing was the future of computing. Um, the.

Steve Tuck: Ah, company joint. It was acquired by Samsung so in 2 16 Samsung came through and and and bought join it and the reason that they bought joint was another kind of light bulb that went off Samsung in 2012 was was selling devices against. Apple and where they were selling camera quality and processor power Apple was selling. You know we have your whole family and life wrapped up in a software platform much more compelling kind of product vision and that was in Samsung deeply realized they had to catch up on software and to do that they started using cloud computing. So 12 they were a very small cloud computing customer by 2015. They were a massive cloud computing customer you know on their way towards spending you know eight nine figures in the public cloud and they realized that for all the business innovation. They were catching up and developing software faster and they couldn’t afford to stay. They were losing money for every mobile user they were signing up and they recognized like we can’t keep building on the public cloud only we’ve got to keep this innovation but move on-prem got to own this infrastructure. Samsung is 1 of the biggest technology owners in the world. They so they kind of canvassed the market and found that there was no technology solution to bring cloud computing on premises so they bought a cloud computing company.

Alejandro Cremades: So Then So. And I.

Steve Tuck: And needless to stay. There’s there’s not enough cloud computing companies for kind of the the rest of these large enterprises that had that were conflicted in that way and that was that was definitely a bit of ah of a light bulb and then I think the last one was when we were at joint we were building this large global cloud computing business. And we were running into a lot of issues where our software met the hardware where our control plane kind of the sophisticated software layer that helps deal with multi-tenancy and elastic infrastructure services where that ran on commodity hardware dell super micro orrista these these. Systems that you know had largely looked and stayed the same for the previous decade decade and a half that’s where all the issues were emerging in in our large cloud stack and we were talking to Amazon Google Facebook that the folks over there asking them how they were dealing with these same issues and that’s. You know when the big reveal happened’t that they had been designing and building kind of modern cloud purpose built infrastructure for almost a decade and that this was sort of off limits to those that were that were building themselves on-prem.

Alejandro Cremades: So then so then obviously you know you guys send up a getting going with oxite. So I guess for the people that are listening to really get it. What ended up being the business model of oxide. How do you guys make money.

Steve Tuck: Um, yeah, so you know our our core kind of premise and oxide is is number 1 again that the future of computing is cloud computing and that and cloud computing is not this notion of renting space at Amazon or you know Google or Microsoft it’s actually an architecture. It is a programmable interface to elastic infrastructure services that make it super easy for developers to deploy software and operate software and if you also believe that cloud computing is important and will be ubiquitous. Ah, then it’s a pretty logical next step that that that primitive can’t only live in a rental only model with these service providers. It would be like for for for accommodations. The hotel model being the only way you can live.

Steve Tuck: There’s no houses. There’s no apartments. It’s only hotels and so our core belief was that you needed to have a computer that ran your cloud that you could own and it turns out the on-premises market is you know, a very very very large multi $100000000000 market that is largely underserved. And and the third piece was if you’re going to build a cloud computer. You’ve got to do hardware and software design together and this is probably the most important kind of bit ah core belief of ours. You know like. Nvidia and Apple and Tesla and others that these kind of like outsize benefits to customers come about when companies take on both hardware and software which was extremely controversial in the computing industry right? and it was one of the biggest questions we’re raising our seed was like what do you mean you’re building hardware. I thought is are isn’t everything just a software problem or are there are there even computers anymore and so to your to your question we have we set out to build a computer. That is much more in line with what you would find in the cloud hyper scalers that drive all of their benefits and innovation. But now it’s for the first time open to the commercial market. So if you’re a fortune 1000 company that has.

Steve Tuck: And spends half a billion a billion dollars in it infrastructure on-premises every year along with your public cloud spend you now can get the same benefits of cloud computing. But in that on-prem owned model. And so we we sell. Ah we sell hardware and software together in an appliance-like solution that that companies buy deploy and run.

Alejandro Cremades: That’s amazing and I know that you guys have raised a you know close to ah eighty million bucks but I know that they right after the series. A there was ah a nerfraccking moment that involved all of a sudden you know all the money to evaporate you know. How was that because I know that it was a really tough time a tough time where you guys were at the same moment literally in parallel dealing with a reulatory you know compliance and hurdles. So I’m sure that dealing with those 2 things at the same time. It was probably a nightmare but they but what happened there and how did you get through it.

Steve Tuck: Yeah, so we hid we had we were in the process of raising our series a and um and then had a whole lot going on as we were finalizing the product and getting the product ready to market because you know the system is I say hardware and software. It is. A de novo’s server design that’s kind of built for cloud computing. We did our own switch on which in and of itself was a bit controversial early on as we were talking to investors and then we were assured by those that had been say at 8 of the us early that you. And to build the switch into the computer if you wanted to really build for true cloud computing did our own operating system firmware control plane there there was there were a lot of pieces that were that were coming together as we were getting close to ship and so we had raised the first tranch of our series. A. And you mentioned compliance it turns out when you’re shipping equipment like this into the enterprise you have to pass Fcc compliance. There’s these emission standards that you have to meet so that you don’t have people shipping electronic equipment at data centers that are you know sending radio signals everywhere. We we talked kind of extensively about that in in our on on our oxide and friends podcast just talking about these things people don’t typically go to Depthon Pcba bring up and and compliance so we get through compliance huge hurdle. So now we’re ready to ship.

Steve Tuck: And and then March hits and the funds that we had just raised are effectively unavailable because we had everything with Svb and I know that in the in the sort of communities is an all too common story because most people banked with svb but. It was a pretty dark period because all the energy that had gone into getting that raise done and then having no idea what was going to happen over the next couple of weeks. So the first focus was payroll for everybody. How do you make sure your employees get paid. Um, we were. Very fortunate that we had our core investors that had offered to wire money if need be to cover payroll but the other side of it is what does the six month outlook look like twelve month outlook look like because if you wanted to get a comp and look back at what happened to Washington Mutual and 2008 the distributions of cash from that were still happening in 2022 so that means that firms that had their money with svb like the worst case scenarios where you were going to get sixty cents on the dollar and you were going to get that over the course of many many years and you know the the thing that was probably most difficult for us was our employees right? because they is is all in the news. So their families are asking them. Do you stole a job. Are you getting paid? What’s going to happen oxide and um and things were during that week

Steve Tuck: From that Wednesday when the first smoke started to kind of show up to when a fed took over the bank on Friday morning. Um you you heard all kinds of different stories flying around the thing that we you know I mean. Again god bless our investors that that had let us know they were behind us. They were going to make sure we could continue the business that we were going to the employees were going to get paid was just being as transparent as we could at the employees letting them know all the information we had as we had it even even as harrowing as it may be I think it’s more paralyzing for folks. Ah, to to be kind of theorizing about what might happen then even knowing explicitly what is occurring and and and sometimes how little you know about the about the situation. Um, but yeah, that was ah that was an unexpected one I think you know covid. Covid hitting within three months of raising our series seed and then sbb collapse within a couple of months of of our a. We’re definitely. You know we we knew some of the headwinds and the risks in a startup and a a startup like this.

Alejandro Cremades: The the excitement and the adrenaline never stop since Steve now I have a question for you he because obviously as we’re talking about money and we’re talking about investors. You know it’s always betting on a vision. So as we’re thinking about the vision of oxide.

Steve Tuck: Those 2 were not planned.

Alejandro Cremades: If you were to go to sleep tonight and you woke up in a world where the vision of oxide was fully realized what would that world look like.

Steve Tuck: Um, I think you you would see a world in which the on-premise side t market which you know by any by some measures is is on the order of 150 to two hundred and fifty billion dollars um that market today is still made up of a kit car. 4 or 5 different id vendors kind of smash together in these racks that is running in about as inefficiently as you could imagine the the average rack in the data center today 25% of the energy of that rack goes just to moving fans. Which is wild. Ah, the average utilization of the resources available in these racks is 25% in aid of us that utilization is seventy eighty percent it would it. It. It do us be at of business if they ran anywhere close to the way the infrastructure.

Steve Tuck: The the kinds of technologies and infrastructure that’s available to folks that are running on protoday you’ve got very little automation. You do not have the same kind of elasticity and services that make it easy for multi-tenancy and for developers to be productive. So um I think that. A future that is necessary is expanding and extending all the innovations that have gone into cloud hyperscaler infrastructure over the last fifteen years and converting that on-prem market to being vastly more efficient vastly higher utilization. And fully api-drive in and programmables you get to take these brilliant folks that these enterprises and and everyone has that are they are typical that are that are excellent engineers that are working on things like bios updates and license management and server racking and stacking. And letting them free up their talents to go work on the things that each individual business is is building and known for what their customers are looking for and if that happens you’re going to see just gdp growth. You’re going to see productivity in the markets that we just haven’t had before. And and then we’re also going to see the ability to take on new technologies in support of things like Ai because we are much more energy efficient in the way that we’re running infrastructure on premises and to do that. you’ve got to you’ve got to change the.

Steve Tuck: The the definition of what the computer is it no longer can be this little pizza box that is totally disassociated from networking and storage and software and you need to have a ah really well designed together integrated system that is software driven.

Alejandro Cremades: So we’re talking about the future I want to talk about the past to october two thousand and nineteen okay I’m bringing you back in time you have that younger Steve right in front of you. What would you tell that younger Steve before launching the business and why.

Steve Tuck: Um, oh man, well bank with more than one bank nums can I think good that that one that 1 may have that one may have been unavoidable.

Alejandro Cremades: Ah, one one you only have one piece of advice. 1 piece of advice. What would you tell that younger Steve.

Steve Tuck: Um, I think what I would tell myself is that no matter how difficult or seemingly impossible things are at any 1 particular moment i. You’re going to clear that next hurdle the company is going to clear that next hurdle that and and really just maintaining optimism throughout I think the um the the.

Steve Tuck: Optimism and transparency have been the 2 most important values of the values that we I mean I look I could I could pick any any 1 of them. But ah, you know, leaning into transparency and then making sure to maintain optimism I didn’t have to tell myself this at the time that if it were. You know 6 months earlier it would have been make sure that you um are I would put it differently. The most important thing we did was making sure that we when Brian and I founded the company together it was choosing a partner that had. The same goals the same values the same principles and really the same kind of long-term view I mean you you asked a question earlier about being at 2 companies over 20 years you know we we founded this company not to build a computer company. We founded this company to build the kind of company that employees could be proud of saying they work for. In 20 years and that we would be able to recapture that same moment in time where I was at dell and looking at the stage and Brian was at some microsystems and looking at the stage and ah and create a culture and a team and a mission that that folks would be incredibly proud to be a part of and.

Steve Tuck: Um, I think you know just making sure to stay on that original vision and set of goals despite venture capital and despite all the different things that are going to pull you in different directions. Um that that that has been the most important part of the journey so far.

Alejandro Cremades: That’s amazing. Well hey Steve for the people that are listening I will love to reach out and say hi. What is the best way for them to do so.

Steve Tuck: Um, yeah, ah you can can reach me on Twitter my dms are open at sd talk. We’ve got a a a not to ah not to promote one a podcast on a podcast. But. We we have shared a lot about oxide on our oxide and friends series and kind of runs runs the gamut. But if you’re interested in the the hardware software interface that one is is got a lot of the war stories for and scars from. You know pcb bring up to ah to compliance and and all all the things the ups and downs along the journey. Um, and and and I think those are probably the two best factors.

Alejandro Cremades: Amazing! Well hey Steve thank you so much for being on the deal maker show. It has been an honor to have you with us today.

Steve Tuck: Um, yeah, thanks for having me.

*****

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