We interrupt this program …
Our monomaniacal focus at Domino is creating a platform that makes data scientists more productive and facilitates collaborative, reproducible, reusable research.
We are somewhat scornful of the extreme attention fundraising gets among startups these days. From reading the press, you could forgive someone for thinking that startups exist to raise money, not to build and sell products to customers. At Domino, we vehemently believe the opposite: for us, success is delivering a great product that our customers love.
So we’re going to pause — briefly — to tell you why we raised money and what this changes for whom. To be very clear: we see our raise as a means to an end, not an end unto itself. After this it’s back to product and customers.
Why we did this
For two years, we bootstrapped Domino — meaning we financed the business mainly using revenue and some small investment from the founders. We wrote about how much we benefited from this approach. So the obvious question: why take traditional venture capital now?
When we received our first term sheets several weeks ago, we wrote a budget to see how much hiring (our biggest expense) we could support just on projected revenue. That analysis suggested that the business could easily continue to operate on revenue alone and that we could afford a small investment in additional engineers and sales executives.
Nevertheless, we did the financing for two reasons:
- We’re ready to accelerate, and throwing “gas on the fire” requires outside investment. We currently have 40+ customers and pilots, at various stages, including a dozen Fortune 500 companies. All of them are seeing real improvements to their business based on Domino, and we’re going to invest in making the product even better for them. We also want to find a lot more of these analytically sophisticated customers. All of that takes more investment than our current level of revenue (which is actually a trailing indicator) can support.
We think the three investment firms we are working with will meaningfully change the trajectory of our business. To be clear, this is a hypothesis, which we will report back on in a couple of years, and one that we were initially skeptical of. But we tried to diligence the firms we ended up working with almost as much as they diligenced us. When we found ourselves talking to the fourth CEO of a very successful startup who was saying, like the previous three, “These folks were material to our success,” we concluded that either 1) we were wrong generally about the additional value venture capitalists bring or 2) we had found the exceptions. It also helps that all three firms are deep experts in our space (analytics).
For these two reasons, we did the deal.
What this changes
It’s good news all around:
For our customers, the product will evolve more rapidly than ever. We are tripling the size of our engineering team, so expect to see tremendous evolution starting almost immediately.
For startup job seekers, Domino is hiring. We are looking for engineers, data scientists, and sales executives who want to take on large responsibilities and help us grow at a key point in our trajectory.
For those observing the analytical space, it’s a good time to take note of Domino’s enterprise analytics platform, which we think will soon be a key piece of infrastructure at every analytically advanced enterprise.
Final note: it’s very important to say thanks to everyone who helped get Domino this far, especially our early employees and our early customers.
Now back to business (literally) …
— Matthew, Nick, Chris