How to build a storage startup

Here's where it all falls apart

> Most folks don't typically have a spare $100k around, nor the ability to bootstrap for three months, so this usually means the startup consists of four people, with the fourth being the pre-angel funder. In most cases this individual doesn't concern themselves directly with running the startup.

You can readily identify these pre-angel funders They are the ones riding the unicorns.

All this stuff is great if you are writing a screenplay for a geeky "sci-fi" drama. In practice it never happens. Nobody knows individuals who are willing to drop $100k in 3 months in the hope that something they don't understand might, just, turn into a winner.

As it is, most startups require their "core" people to show some level of commitment to the project. Put in purely financial terms, for a bunch of millenials still living with their parents, this means paying for your Oyster card and maybe a pizza on Friday lunchtime. Even for regular people, with commitments and families you'd be hard-pressed to find a pre-angel willing to stump up more than £1k a month for a couple of people.

Ever seen a storage startup and thought: 'Pshaw. I could do that?'

Not exactly. Most of the time I think: I could do that. But I like actually having money. And having a life.

Some comments from experience

Dear Trevor, I have some first hand experience in something similar :-) albeit in Europe and not Canada, but most of the economics remains the same.

I would say for a start that a total of 3 man/month of development of even a very good developer are not enough to come up with a product. Even a bare scaffolding+glue+cat pictures form of a product.

There are two ways:

1) you are assembling lots of things together and write some glue code and nice interface. This is what many vendors do with ZFS, for example; tuning, optimizing and painting a nice interface on top. I have looked at quite a few, and they all require at least 10 to 15 MM to be replicated (in a way that is functionally stable or at least that doesn't lose much data...)

2) you are making a new storage systems, that would probably fall in the "distributed" category. Even the smallest and simpler ones I know have a COCOMO estimate of several man-years of work (Ceph would require more than 200 man years, as a reference point).And would require at least a bit of research- distributed is a very complex field.

I would say that a real minimum would be more in the 1 or 2M$ range, including some expenses for things like promotion at events, marketing efforts and so on.

It took us 2 years with 4 people full-time to reach a MVP; thankfully we were financially supported by the European Commission with several research grants.

Can't wait to read part 2, though :-)

A book to read...

"Once you're Lucky, Twice You're Good" by Sarah Lacey has a lot to say on this topic. On the surface it is the story of the "PayPal mafia" but it is also a primer on how VC funding works.

Described above is a way to organize prior to finding an Angel. The prototype described is one way to persuade an Angel to come on board.

The hard part isn't the money...the hard part is to come up with the right product/approach. You'd be crazy to try to kick up a new storage startup in this market unless you had truly jaw dropping innovation or approach...smart angels can smell things like yet another implementation of FOSS with no true differentiation....everyone knows about ZFS anymore.

By the time you are reading about truly disruptive technologies on El Reg, some people will have 2 or more years head start on time to market - and most will fail anyway.