What they do. “We are a leading storage cloud platform, providing businesses and consumers cloud services to store, use, and protect their data in an easy and affordable manner. By substantially reducing the complexity and frustration of storing, using, and protecting data, we empower customers to focus on their core business operations.”
Transparency with customers drives trust. “Transparency is more than a value for us, it’s our default approach. We release quarterly hard drive reports detailing the performance of each serial number and brand of the nearly 200,000 drives in our datacenter. We shared exactly how we store customer data redundantly, and how we do it inexpensively. We shared the source code algorithms used to encode and replicate our customer data to keep it safe. When we face problems, like we did during a 2010 power outage at a datacenter, we openly share what went wrong and how we will do better in the future. When there are problems with our software, we share what went wrong and the steps being taken to fix it, like in 2016 when a bug in a different company’s software caused problems with the Backblaze client if both pieces of software ran on the same customer laptop. This openness has been met with customer appreciation and loyalty.”
A great place to work, with dogs. “Of the first 100 employees, more than half worked with us at previous companies, which speaks to our reputation, as do our Glassdoor ratings — 4.9/5.0 stars, 100% CEO Approval, and 100% Recommend to a Friend as of December 31, 2020. To attract and retain such a team, we provide a warm, friendly office environment where families and well-behaved dogs are welcome.”
The marketing cache of an IPO is huge. “an IPO is a branding event — a coming of age party. It marks the end of the startup period and the beginning of an era where we are a trusted, mature company without the “startup” qualifier.”
Extremely cash efficient. “Our operations have historically been efficient with limited outside investment. Prior to issuing $10.0 million of convertible notes in a private financing round in August 2021, we had raised less than $3.0 million in outside equity since our founding in 2007. We decided to create Backblaze differently, and with essentially no venture capital funding.”
They grow with the customer and via product upsell. “We provide simple pricing for usage of our cloud services and increase revenue per customer through our customers’ natural data growth or employee growth. Additionally, we provide customers with additional value through cross-sell, upsell, and use case expansion that result in additional revenue per customer.”
However, a true sales function results in larger customers. “In addition to our self-serve selling motion, in recent years we have begun to invest in a sales-assisted selling motion to identify opportunities to increase business with existing customers and to assist larger customers in adopting our services. Our sales-assisted selling motion has experienced substantial growth and helps customers that, in 2020, were approximately 20 times larger in terms of average revenue per customer than our self-serve customers.”
Land and expand of course. “We employ a land-and-expand model that drives additional revenue from existing customers. As customers generate, store, and back up more data, their use of our platform increases, creating natural opportunities for revenue expansion. We are able to further expand our relationships with our customers when they adopt new features and use cases that lead to increased usage of our platform. Our land-and-expand strategy is evidenced by our overall net revenue retention rate of 113% and 114% as of December 31, 2019 and 2020, respectively. As a result of our efforts to-date, as of June 30, 2021, our revenue per customer has grown 45% since the first quarter of 2019.”
90% gross dollar retention. “We believe our high gross customer retention rates demonstrate that we serve a vital service to our customers, as the vast majority of our customers tend to continue to use our platform from one period to the next.”
SME’s are overlooked by cloud vendors. “Diversified cloud vendors optimize for large multinational enterprises with significant IT resources and expansive, complex use cases. According to Flexera’s 2020 State of Cloud survey, businesses with fewer than 1,000 employees have substantially lower cloud bills and IT spend, and on average 56% of these businesses are spending less than $600,000 annually compared with only 12% of enterprises. The financial opportunity that enterprise customers represent influences the product roadmap and engineering focus of diversified cloud vendors, resulting in solutions that are not optimal for mid-market businesses.”
Visit us at blossomstreetventures.com and email us directly at sammy@blossomstreetventures.com