Perspectives: A Conversation with Ratmir Timashev

Reflections on moving through the expansion stage

 

 

Ratmir Timashev is president and CEO of Veeam Software. In 1997, he founded Aelita Software, provider of award-winning Windows Server systems management software.

 

Aelita Software was acquired by Quest Software in 2004 for approximately $115 million. After ensuring the successful continuation of Aelita’s products and strategy at Quest, Ratmir founded Veeam Software to provide similar systems management solutions for virtualized server infrastructures.

 

Ratmir earned a master’s degree in Chemical Physics from Ohio State University in 1995. He enjoys sharing his knowledge and ideas to fuel innovative IT solutions around the world.

 

We recently spoke with Ratmir about how accepting venture capital for Aelita, which he didn’t really need, helped him take the company to the next level.

 

Is it true that you started Aelita Software out of a campus apartment?

Yes, that is true. I was a graduate student at Ohio State. My partner Andrei Baronov and I took some of our savings and started an online store selling computer parts. Andrei had just returned from Russia with his doctorate. It was 1996 – before Amazon even existed. We were one of the first online stores out there. During this time, Andrei built a software tool to scan passwords and shared it for free through online newsgroups. I saw a market opportunity so we created a business plan to develop software tools. We released our first system toolkit in 1997. It was a great time to be in the market – the market was growing and we grew with it. We were doubling our revenue every year.

What made you decide to accept venture capital?

Up until the time we took $10 million in venture capital, we had never had any outside funding. We had started the company with $10,000 or $20,000 of our own money, which we had made from our online computer store, and built the rest on profits. Five years into it, in 2002, our revenue was at $18 million. We had about 60 employees throughout the U.S. and Russia. Right around then we were approached by Insight Venture Partners. We had $8 million in the bank and we didn’t need the money. What we did need was a partner to help us build the business. Not only were we inexperienced in the software business, but neither of us had ever worked for any company, period. We had built our business based on gut feelings and advice we got on the Internet and from books – from scratch. We made mistakes, but we had a good market space and good products, and we worked really hard.

How did working with the venture capital firm add value?

Their team helped us:

• Reduce the number of mistakes we were making.
• Attract better talent – here we were, two students out of Dublin, Ohio – not exactly Silicon Valley. It was difficult to attract talent and we didn’t know how to hire people. The fact that we had an investor was a seal of approval; it helped us convey the message that we were a good company with a good business model. With their assistance, we were able to develop job functions, understand the hiring process, and create a strong management team.
• Develop an overall strategy that took us right up to our exit – without them, we would not have been as successful at exit as we had expected.
• Improve our inside sales effort – part of that was helping us find a good consultant who helped us increase revenues.
• Develop a system for generating leads – we had been going by our instincts, but they showed us how to build a system, scale it, and measure it.
• More effectively position and market our products.

Were there any areas where you got lucky?

If you are strong, then luck is everywhere. You can be in the right market space at the right time with good products. But you’re not going to make it if you don’t work hard. Luck is for winners and winners are lucky.

You said you made mistakes – can you give a few examples?

No one knows all the answers. It’s better to make a decision and then change it. Maybe we spent too much on marketing without measuring the results. Maybe we spent too much on branding without lead generation and measuring. We went through five sales VPs before we found the right one! We lost a lot of time, money, and opportunities during that time. Our venture partner taught us what to look for – once we learned, we improved. A good partner can’t totally eliminate the wrong choices, but can help you minimize them.

What is your management style and how did it contribute to your early success?

You have to have a good vision and be able to communicate it clearly. Then the entire team becomes successful. But more importantly, especially in the early stages, all parts of the company (development, sales, marketing, etc.), have to be a team. There can be no bureaucracy. I have an open-door policy and promote a respectful, family-type atmosphere. There are no politics, everyone has common goals, and everyone is rewarded according to their contributions.

Any words of advice to senior managers of young technology companies?

In technology, you must find the right products for a hot market. There is no science for this and no one can teach you how to do it. You just know, and you go out there and create the products and find the markets. You have to listen to your customers. Bad feedback is OK – at least they care. No feedback is bad. Good feedback is excellent.

You have to be in the right place at the right time – you have to be nimble. If the original idea doesn’t work out, you have to be flexible and change it. In many instances, the original idea doesn’t work – you start in one place and end up in another. Again, listen to your customers, especially in the early stages. Persistence is important, but be flexible.

In this field, you have to move fast. It is worse not to make a decision, than to make one and change it. In technology you are growing or dying. You cannot just ‘be there,’ like in other industries. Keep going. Get something out the door, get the feedback, and then keep working on improving it.

And finally, trust your gut feelings, have confidence in yourself, and work hard. Partners are important, but if you don’t have these three attributes, nothing else will work.