Archive for July, 2018

The Istio service mesh hits version 1.0

Istio, the service mesh for microservices from Google, IBM, Lyft, Red Hat and many other players in the open-source community, launched version 1.0 of its tools today. If you’re not into service meshes, that’s understandable. Few people are. But Istio is probably one of the most important new open-source projects out there right now. It sits at the intersection of a number of industry trends, like containers, microservices and serverless computing, and makes it easier for enterprises to embrace them. Istio now has more than 200 contributors and the code has seen more than 4,000 check-ins since the launch of  version 0.1. Istio, at its core, handles the routing, load balancing, flow control and security needs of microservices. It sits on top of existing distributed applications and basically helps them talk to each other securely, while also providing logging, telemetry and the necessary policies that keep things under control (and secure). It also features support for canary releases, which allow developers to test updates with a few users before launching them to a wider audience, something that Google and other webscale companies have long done internally. “In the area of microservices, things are moving so quickly,” Google product manager Jennifer Lin told me. “And with the success of Kubernetes and the abstraction around container orchestration, Istio was formed as an open-source project to really take the next step in terms of a substrate for microservice development as well as a path for VM-based workloads to move into more of a service management layer. So it’s really focused around the right level of abstractions for services and creating a consistent environment for managing that.” Even before the 1.0 release, a number of companies already adopted Istio in production, including the likes of eBay and Auto Trader UK. Lin argues that this is a sign that Istio solves a problem that a lot of businesses are facing today as they adopt microservices. “A number of more sophisticated customers tried to build their own service management layer and while we hadn’t yet declared 1.0, we hard a number of customers — including a surprising number of large enterprise customer — say, ‘you know, even though you’re not 1.0, I’m very comfortable putting this in production because what I’m comparing it to is much more raw.’” IBM Fellow and VP of Cloud Jason McGee agrees with this and notes that “our mission since Istio’s launch has been to enable everyone to succeed with microservices, especially in the enterprise. This is why we’ve focused the community around improving security and scale, and heavily leaned our contributions on what we’ve learned from building agile cloud architectures for companies of all sizes.” A lot of the large cloud players now support Istio directly, too. IBM supports it on top of its Kubernetes Service, for example, and Google even announced a managed Istio service for its Google Cloud users, as well as some additional open-source tooling for serverless applications built on top of Kubernetes and Istio. Two names missing from today’s party are Microsoft and Amazon. I think that’ll change over time, though, assuming the project […]

What every startup founder should know about exits

Benjamin Joffe Contributor Benjamin Joffe is a partner at HAX. More posts by this contributor 70 years of VC innovation 2017 crowdfunding guide The dream of a startup founder can often be summarized by the following well-intentioned, and mostly delusional, quote: “We’ll raise a few rounds and in a few years we’ll IPO on Nasdaq.” But a more likely scenario looks something like this: You invest a few years of hard work to build something of value. One day you receive an acquisition offer out of the blue. You’re elated. And you’re not prepared. You drop everything to focus on this opportunity. Exclusive due diligence starts. Your company is a mess (IP, contracts, burn). Days become weeks; weeks become months. You’ve neglected business and fundraising. You’re running out of money. M&A is now your one and only option. The buyer says they found a bunch of cockroaches in the walls and drops the price. Now what? Sound unlikely? This is still a favorable situation: You had an offer! Think about how much time you invested in your various funding rounds. The hundreds of names and Google spreadsheet or Streak-powered quasi-CRM process. Have you spent even a fraction of that on understanding exit paths? If you’d rather not live the situation described above, read along. The E-word: A strange taboo Investors live by exits, but many founders keep dreaming of unicornization and avoid the “E-word” until it’s too late. Yet, in 2016, 97 percent of exits were M&As. And most happened before Series B. Exits matter because that’s when you, your team and your investors get paid. Oddly enough, and to use a chess metaphor, we hear a lot about the “opening game” (lean startup) and the “mid-game” (growth), but very little about this “end game.” As a result, founders miss opportunities or leave money on the table. This is a shame. Our fund has more than 700 companies in portfolio. We want the best possible exit for each of them. And fortune favors the prepared! Now, how to get 700 exits (and counting)? To explore the topic, we organized a series of Master Classes tapping corporate buyers, bankers, investors, lawyers and startup CEOs with M&A or IPO experience in San Francisco. It was a group that included the founders of Guitar Hero —  bought by Activision; JUMP Bikes —  a SOSV portfolio company bought by Uber, Ubiquisys —  bought by Cisco and Withings —  bought by Nokia. Each one for hundreds of millions. Their observations can be summarized below. Maximize optionality “Founders must be aware of what contributes to an exit. This means understanding partnerships and how they are formed in the business space the entrepreneur is working in,” said one Master Class participant.   As founders, you build your product, your company and… optionality. You need to understand the options open to your company, and take steps to enable them. The most likely one is an acquisition, but there are others like IPO (including small cap), RTO, SBO, LBO, Equity Crowdfunding and even ICO. “Exit is not a goal […]