After bootstrapping since 2007 (and becoming profitable in the process), Backblaze takes a $5 million round to boost its comprehensive online backup service
A Q&A with Backblaze co-founder and CEO Gleb Budman. The San Mateo, California–based company was founded in 2007 and raised its first round of institutional funding ($5 million) in late July from TMT Investments.
SUB: Please describe Backblaze, and the value proposition you offer to consumers and businesses.
Budman: Backblaze is an online backup service. We automatically backup all data on people’s laptops and desktops so that if their computer is lost or stolen, a drive crashes, or they simply overwrite a file, they can get their data back. The service costs just $5 per month for unlimited data.
SUB: Who are your target users?
Budman: Regular individuals and businesses. On the business-side, we focus on small-to-medium sized businesses.
SUB: Who do you consider to be your competition?
Budman: Carbonite and Mozy are our most direct competitors. However, our biggest competition comes from apathy—doing absolutely nothing to backup—which is what 90 percent of people do.
SUB: What differentiates Backblaze from the competition?
Budman: Backblaze is the only online backup service that automatically backs up all data, rather than requiring the user to pick files and folders to backup, thus making it incredibly simple to setup. We also are truly unlimited: unlimited storage, unlimited bandwidth, unlimited file sizes, unlimited file types. Finally, we offer a Locate My Computer feature to help find a lost or stolen computer.
SUB: When was the company founded and what were the first steps you took in establishing it?
Budman: The company was founded in 2007. Five of us quit our jobs and committed to one year without salary as the Seed round for the company.
SUB: What was the inspiration behind the idea for Backblaze? Was there an ‘aha’ moment, or was the idea more gradual in developing?
Budman: The inspiration was when one of our co-founders, Brian, had a friend who had a drive crash and lost all her data. Brian offered to help her and asked where her backup was, at which point she shouted: “Look, what I don’t need now is a lecture; what I need is for you to get my data back!” Of course, without a backup he couldn’t help her.
The subtleties of the unlimited model, the $5 per month price, and other components came more gradually.
SUB: How did you come up with the name? Is there a story behind it?
Budman: Brian (Wilson, co-founder and CTO) previously had a consulting company called CodeBlaze. ‘Blaze’ was a fairly unique term to add to a name and Backblaze implied the right things.
SUB: What have the most significant obstacles been so far to building the company?
Budman: Figuring out how to handle such a tremendous volume of data efficiently was a big challenge and required a tremendous amount of development in building out our own cloud storage system.
SUB: You just raised $5 million in your first round of funding. Why was this a good time to raise this round, and how do you plan to use the new funds?
Budman: This was a good time because we felt we could use the funding to grow faster, but would not risk too much dilution, loss of control, or change to our customer-focused culture. We are going to use the funds to grow global marketing as well as to accelerate hiring on the product team.
SUB: Do you plan to raise additional funds in the near future?
Budman: We don’t plan to raise additional funds in the next 12 months. If we find that we are getting good value from the extra spend, we may raise funding after that.
SUB: How does the company generate revenue or plan to generate revenue?
Budman: Backblaze is already profitable and has been for a couple years. We generate revenue by charging for the service.
SUB: What are your goals for Backblaze over the next year or so?
Budman: We intend to staff up the team a bit, learn a lot about what works with paid marketing, release mobile apps, and enhance Backblaze for Business.
Backblaze – www.backblaze.com