MGMT Boston - W3, Q2 23 - CloudZero // Mark Hardy, Black Kite
CloudZero // Mark Hardy, Black Kite
TLDR:
CloudZero - B2B SaaS cloud cost intelligence platform that puts any cloud or software spend into context for your business
Mark Hardy, Director of Revenue Operations @ Black Kite - whether it’s his affinity for competition, brotherly love, or solving puzzles Mark Hardy has always been destined for the camaraderie of a startup
Other Resources:
Boston Tech Big Board - building out data on every Boston area venture backed software company I can find
Q2 Startups Highlighted: Wonderment & EKOS
Q2 Operators Highlighted: Dana Wensberg, Paperless Parts & Jasmine Pogue, Skilltype
CloudZero
Founders: Erik Peterson, Matt Manger
Founding: 2016
Mission: Make efficient innovation a reality for every cloud-driven organization
Employees: 53 & ~50% Local
Workplace: Remote
Stage & Capital Raised: Series A, $15.6M
Investors: G20 Ventures, Matrix Partners, Underscore VC
Key Customers: New Relic, Rapd7, Malwarebytes
Glassdoor Rating: 5.0
Valuation (estimated): $50M+ (assuming they sold ~20% of the company in the $5M 2017 Series A fundraise and subsequent growth factored in)
^ this is a useless number. There is no tangible valuation until the business is sold or goes public. Don’t forget it!
CloudZero is “software for cloud infrastructure costs.” The company was founded in 2016 by Matt Manger and Erik Peterson. Matt and Erik are two experienced technical leaders who met at Veracode and had personally dealt with the pain of managing infrastructure costs across multiple clouds, dashboards, and functions.
Back in the late-2000s, Erik was tasked with a project: Scrape the entire internet to identify all of the websites in use by one prospect, and then scan them all for security vulnerabilities (which ended up being about 25,000 sites) - oh, and keep project costs under $3,000. He decided to use what was then a relatively new technical solution, AWS, for the project. Erik successfully completed the project for $2,780.64, prompting his then-employer Veracode to start using AWS much more aggressively. With the increased uptake came increased costs - gentle at first, then exponential. Erik craved a cost visibility platform that would give him relevant, timely views into what his cloud infrastructure cost (and how to manage it effectively). Dissatisfied with incumbent offerings, and the lack of focus on cloud engineering, Erik took Veracode colleague Matt Manger to dinner, where the two agreed to solve this challenge on their own.
Traditionally, software companies (pretty much all companies at this point) look at their infrastructure costs at the partner level. AWS, Azure, Google Cloud, etc. Costs have been racking up pretty relentlessly these past few years if you haven’t heard. Product development and user growth have taken precedent ahead of a more optimized and sustainable way to measure cloud usage. With budgets and tech markets tightening up faster than Storrow Drive on Marathon Monday, there has never been a more urgent time to change the status quo. Engineers, the people most central to cloud infrastructure development, need to be empowered with relevant, timely cost data.
CloudZero is the B2B SaaS cloud cost intelligence platform that puts any cloud or software spend into context for your business. By aligning engineering, infrastructure, and finance teams around common metrics like cost per product feature, customer, or development team CloudZero enables better strategic decisions, stronger unit economics, and more efficient spending.
CloudZero ingests and normalizes 100% of customers’ cloud, PaaS, and SaaS spend into a common data model. Trusted by top cloud-driven companies like New Relic, Rapid7, and Malwarebytes, CloudZero helps organizations of all sizes achieve cloud cost maturity. Then, through a combination of CostFormation® (CloudZero’s logic-driven allocation language) and business and technical telemetry data, they allocate customers’ spend data in a framework that mirrors their business. Customers can organize and reorganize spend by business units (customers, products, features) or organizational frameworks (engineering teams, R&D, production) to get comprehensive, near-real-time views into their entire spend environments.
CloudZero powers savings in several key ways through engineering-led optimization, anomaly detection, and FinOps partnership:
Engineering-Led Optimization: CloudZero Explorer lets users quickly optimize spend data according to parameters most relevant to them. This lets individual engineers investigate and remediate unusual spend activity for the infrastructure they own — not get bogged down in data relating to infrastructure they’ve never touched.
Anomaly Detection: CloudZero Anomaly Detection compares hourly spend data from the past 72 hours to hourly spend data from the 90 days preceding it. When the platform logs spend data that exceeds common spend parameters, it triggers a Slack and/or email alert to the engineer(s) responsible for the anomalous infrastructure. The relevant engineers can then quickly investigate and remediate the anomalous activity.
FinOps Partnership: CloudZero’s customer success (CS) team is made up of 100% FinOps practitioners who partner with every customer to ensure smooth onboarding, develop platform proficiency, and surface nuanced savings opportunities. The ongoing partnership includes infrastructure monitoring, regular spend environment reviews, and continuous aggregation of savings opportunities (“Insights” in platform lingo).
Their growth has been nothing short of impressive. Revenue is up more than 11x over the past two years and cloud spend under management is up 7x over that same period too. Their average customer spends $17.2M in the cloud per year.
Operators to Know (Locally):
Miles Adams, Enterprise Account Executive
Natalie (Walsh) Jones, Account Executive
Dustin Lowman, Product Marketing Manager
Michael Lupiani, Director of Sales Engineering
Bob Oakes, Principal Software Engineer
Meaghan Packer, MPA, Revenue Marketing Manager
Adam Rice, Senior Manager of Engineering
Alexander Rogers, Principal Engineer
Errol Silver, Senior Front End Engineer
Adam Tankanow, Founding Engineer
Matthew Yellen, Principal Software Engineer
My investigative powers continue to need work so apologies to the CloudZero team I know I missed many up & coming operators internally
Key Roles To Be Hired:
If I were interviewing here are some questions I’d ask:
Could you share some details about the onboarding process & training?
What are the biggest challenges as you scale the team toward 100 employees?
How have market shifts over the past 6-12 months impacted the market & messaging?
What are the most important roles you’ll be looking to add in 2023 // teams that need the most help?
We’re optimizing for readability here so to learn more about CloudZero you’ll have to D.Y.O.R. I’m excited to watch this team optimize more infrastructure costs for cloud companies. All CTOs, CFOs and back end teams applaud your efforts. See you around town!
Mark Hardy, Director of Revenue Operations @ Black Kite
Whether it’s his affinity for competition, brotherly love, or solving puzzles, Mark Hardy has always been destined for the camaraderie of a startup. Having transitioned from growth equity investing to the world of early-stage companies, Mark currently serves as the Director of Revenue Operations at Black Kite, a high-growth cybersecurity startup headquartered in Boston. Black Kite offers the premiere third-party risk intelligence platform, and Mark works alongside the sales, marketing and customer success teams to create more cohesive go-to-market strategies for the company.
Mark was born in Oklahoma City and spent his early childhood there before his family moved to the Bay Area. He is the second of four boys and often takes on the role of peacemaker among his siblings, although he's not above causing mischief himself. Mark's father worked in real estate and, when given a choice of relocation options for his career, he and Mark's mother opted for the Bay Area, believing it would offer their family the best opportunities. Mark grew up in Menlo Park, at the heart of Silicon Valley, and lived just a stone's throw away from Sand Hill Road. He was exposed to a wealth of knowledge and experience from the many entrepreneurs and investors in the area, providing him with a rich learning environment.
Mark's mother is an accomplished MBA-trained executive who formerly headed up marketing at Oklahoma's largest hospital network. However, after relocating to California and welcoming her fourth son, she transitioned to becoming a full-time mother, which is a business in and of itself when taking care of Mark and his three brothers. Mark fondly remembers that his parents instilled in him and his brothers the values of hard work and treating others with respect from a very young age. As a family, the Hardy boys are tightly knit and all work in the tech and finance industries. Although they share a brotherly bond, they're also fiercely competitive with one another.
Mark looks back with amusement at the time when he and his younger brother, JR, got into a heated argument in front of their entire high school over what he believed was a bad call during an intra-grade school sports competition. However, as the brothers were taught growing up, they were able to (relatively) keep their emotions in check and resolve the issue without causing (too much of) a scene. In fact, their high school principal was impressed enough by their maturity after that heated exchange that he called their mother the next day to commend her for raising such level-headed sons who could forgive and forget following the intensity of the moment. While the Hardy brothers are fiercely competitive and strive to win, they cherish the value of family and always have each other's backs.
As a high school athlete in football and basketball, Mark also had slightly “nerdier” interests in random word and number game apps like Word Scramble and 2048. Mark had a passion for competition and problem-solving outside of the classroom and sports fields as well, which led him to early interest in finance and investing, having opened his first brokerage account at 18 and day trading stocks on Robinhood as an early adopter well before the days of WallStreetBets. Through high school and college, Mark developed a diverse set of academic interests in psychology, computer science, and finance which helped him gain a better understanding of human behavior and generate intrigue in the psychology of business and how to run a company.
Despite both his parents going to the University of Oklahoma and Mark being an avid Sooners fan his whole life, during the summer before his senior year of high school, Mark participated in a program at Notre Dame and fell in love with the Fighting Irish. His first real job he interned at Stifel in New York doing equity research covering the beverages sector. Although he got to analyze large public companies like Coca Cola and Pepsi, Mark realized that his true interests lay in technology, software and earlier-stage, more entrepreneurial private companies. At a Notre Dame career fair early in the fall of his senior year, he met Sean Cantwell, one of Volition Capital's Managing Partners and a Notre Dame alum, and from there was convinced that growth equity software investing was the perfect place to start his career.
This was Mark’s big move to Boston.
According to Mark, he had the opportunity to live in New York and while he enjoyed his time there, he wanted a different experience. He explained, "Boston has an amazing history, restaurant scene, and is the perfect pace for me." Mark appreciates the ease of traveling around New England and loves attending local concerts and comedy shows, with a particular fondness for the Improv Asylum in the North End. He met his girlfriend in Boston, and they both take their dining experiences very seriously, rating every spot out of 10 based on taste, price, and overall atmosphere. Among their recent favorites is ilona in the South End, with Uni, Carmelina's, Little Donkey, and Kava Neo Taverna also ranking high on their list. Mark resides in Back Bay and enjoys taking a leisurely walk down Commonwealth Avenue into the Boston Common on a beautiful day or grabbing a drink with friends at his favorite local bar, Dillon’s. The city has become a fantastic second home for him.
Volition Capital was the ideal place to combine his quantitative skills with developing qualitative sales skills that are vital to deal sourcing work. He quickly learned critical early career skills, such as time management and how to prioritize daily tasks, which are imperative in a fast-paced work environment. Volition has two teams, and Mark worked on the B2B software team with his primary responsibility as an associate being to identify and diligence investment opportunities for the firm. These startups typically had proven product market fit, with $5 - $25M in annual recurring revenue and had not yet raised major institutional capital.
Mark had to quickly learn how to evaluate these opportunities. What business models were they interested in? Which businesses were growing 50-100%+ YoY? Which were capital efficient? How did they achieve their first $10M in revenue - had they burned $5M or $50M to get there? What experience did the management team have and what was the market opportunity for a company in this vertical? His constant challenge was to find the right fit of companies and get them in front of his Partners and Principals before the companies raised institutional funding from competitive firms.
He gained valuable experience working on a multitude of deals across verticals and ultimately was able to work on a deal that closed which allowed him to witness the entire due diligence process. A few months later in the fall of 2021, Volition invested in Black Kite, a third-party risk intelligence startup, which the entire firm was excited about due to its rapid growth, clear product advantages, and large market opportunity. This experience gave Mark an up-close view of the potential opportunities that existed within a growing portfolio company. Additionally, Mark began to feel that working for a startup "in-house" could be a better fit for the next stage of his career.
After feeling this way for a short time, he approached his Volition mentors, Sean Cantwell and Tomy Han, to express his desire for a change in career. They were quick to offer their assistance and introduced him to Black Kite's CEO, Paul Paget. After a successful interview process, Mark became Black Kite's first Sales Operations Manager, with responsibilities spanning from managing all of the company’s sales operations to building out their SDR team mostly from scratch. Despite having no prior operating experience, Mark successfully recruited, hired and trained 15 SDRs, developed their territories, and established more robust operational practices across the sales organization.
Mark's role extended beyond just managing the sales development teams though; he also played a key role in building out the early stages of Black Kite’s revenue operations. He organized and analyzed the company’s Salesforce data to drive better pipeline predictability, track sales efficiency metrics and begin to build a more efficient go-to-market engine. While Mark admittedly still has lots to learn about revenue operations as a job function, he has great internal mentors and peers in Eireann Connolly, Chris Bush, Kat Desy, Phil Johnson, Katie Trojano, Johnathan Bald and Julianne LaBrecque to name a few who help him navigate the day to day operational items that come up in his role. Mark is enjoying the ability to learn, try, fail and succeed in continually working to improve the interoperability of people, process and technology at Black Kite.
Mark has developed a passion for building companies and believes in the importance of cultivating a strong company culture. He enjoys the challenge of thinking through decisions that impact multiple teams and strives to create a positive and supportive work environment for everyone around him. Having shifted to working under the Chief Operation Officer, Mark works alongside sales, marketing and customer success leaders to develop a well-oiled go-to-market machine in order to help the company achieve efficient and predictable growth. Mark is determined to leverage his skills and experience to drive success for the company and its employees and he is excited about the opportunity at Black Kite for many years to come.
Mark shared four key takeaways from his experience in growth equity investing, building cybersecurity go-to-market teams and implementing efficient operational processes:
Be proactive, not reactive: Identify and deal with operational issues now before they become a bigger problem for teams down the road.
Take chances on people: Commit to hard-working candidates who may not have the exact background or fit for the job description, but who you know will put in the required hours of effort to learn and succeed in the role.
Culture is critical: Building a strong culture within a company is essential, especially at an early stage startup. People need to feel heard, respected, and cared about which in turn drives loyalty and commitment to the shared goals of the company and the team.
Long term, capital-efficient growth requires relentless operational execution and dedication to a culture that fosters collaboration, hard work, transparency and understanding: Striking a delicate balance between motivating individuals to work hard and cultivating a workplace culture that values authenticity and compassion is crucial. It is important to consistently be able to navigate this balance with care and intention.
Mark is excited to continue building Black Kite with his incredibly talented coworkers over the next several years until they achieve a successful exit. He loves the growth stage and automating processes to help every department become more efficient, and hopes to someday run a company of his own as an executive.
To learn more about Mark, you can either find him on LinkedIn, frequenting top Boston food establishments, attending the next Mt. Joy concert or perhaps planning another Hardy boys get together. Thanks for sharing, Mark. We can’t wait to see the impact you make at Black Kite and their go-to-market organization in the years ahead!
Any feedback for me? One thing you liked? One thing you didn’t? Local startups or operators to highlight? Just reply to this e-mail!
See you next week!
-Matt