Interview: Thorsten von Eicken of RightScale

Messenger: Thorsten von Eicken, RightScale’s Co-Founder and CTO, Chief Architect at Citrix Online (formerly Expertcity) and Professor of Computer Science at Cornell University and UC Santa Barbara

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10) Thorsten, why does the world need RightScale? 

“Oh, you got me there right in the first question! Does the world really need more servers in more datacenters gobbling up more power to send more tweets and Facebook pages around the world? Or would you like me to sell you a story on how cloud computing is green because these large datacenters are more energy efficient than the same number of computers run in ad-hoc ways?

Let me answer ‘why computing needs RightScale.’ Computing is going the way of the electric grid. I thought the analogy was preposterous back in 2006-2007 but it has become obvious. For this to happen the use of compute servers needs to become much more automated and agile than it is today. All businesses need to have access to the scale, cost structure, and flexibility that the Amazons, Googles, and Facebooks of the world have built internally. That’s what we’ve started to tackle and the mission RightScale is on. Despite all the hype out there, this is still day one of this revolution.”

9) The story of how you started RightScale is classic. In the summer of 2006 over a cup of Peet’s Coffee, you told me about this new thing called “cloud computing” and that you were trying to come up with a creative way to incorporate it into the curriculum of your upcoming UCSB Computer Science class. For those who don’t know the rest of the story, please tell us what happened and how you eventually found yourself on stage at Amazon’s Cloud Computing Expo as a keynote speaker.

“By the way, back then it was just Amazon’s Elastic Compute Cloud [EC2] and both ‘Elastic’ and ‘Cloud’ were candidate key terms. The term ‘cloud computing’ only caught on much later. I taught a somewhat crazy course about writing and deploying a scalable website in Ruby on Rails and deploying it in EC2. I was learning Ruby on Rails just ahead of the students and wrote the tools to help them manage the servers in EC2. Towards the end of 2006 I realized that EC2 was transformative and that people needed help understanding it as well as tools to work it. That’s when I decided to put what I built out there and see how to make it stick.

Along the way many things came together: being able to find the right people, getting great customers, having lots of luck, being in the right place at the right time. One key decision early on was that RightScale needed to become big fast. We were in the center of the activity and thus would soon race against everyone else, many with much deeper pockets. That led us to venture capital as opposed to trying to bootstrap ourselves. We always focused on making the story bigger.”

8 ) You walked away from a tenured professorship at Cornell to join Citrix Online, which I always felt was a very gutsy move. When you began your teaching career, did you plan on eventually being an entrepreneur? What guidance can you give to anyone in a financially safe career who longs for the exciting life of an entrepreneur?

“Academia turns out to be a great place to start from because the system allows you to take a 1-2 year leave of absence relatively easily. Many people go back with lots of new ideas, experience, and energy. I ended up staying at Citrix Online for a variety of reasons, not the least being that it was an incredible mission to be a part of. But throughout the transition I had my safety net. The transition [from Citrix Online] to RightScale was similar. I realized I had to move on, my wife and I looked at the bank account, and gave ourselves a time budget. RightScale came about way fast and before I felt ready.

In terms of guidance the question I’d ask is what makes you happy day in day out? Stock, even converted to $$ isn’t going to do that. Pure excitement isn’t either. If I believe the research and what I experience, most people are happy when they achieve a state of flow where they naturally focus on their activity, are reasonably comfortable that they can make it through, yet are just a bit challenged. This state can be achieved playing games (think of the many levels in online games!), doing sports, and many other activities. But for many people it happens at work--whether they acknowledge or recognize it or not--and I suspect that to be successful at a startup you have to buy into this, perhaps not necessarily fully consciously, and you have to be able to get into a state of flow when the challenge is high.

For another perspective which I certainly agree with, check out Kevin Drum’s blog post on The Power of Single-Mindedness at but keep in mind that anything taken to the extreme probably isn’t a good idea…”

7) I loved the AOL disk “sculpture” you kept in your office at Citrix Online. I always thought it was a great symbol of Big Dumb Company ignorance: carpet bombing the world with unwanted and unneeded disks. Most big companies initially rejected use of the cloud, just as they rejected SaaS solutions when we launched GoToMyPC in 2001. What specific steps did RightScale take to contribute to making it “obvious” to everyone that cloud computing is here to stay?

“From day one we focused on customers. When Michael Crandell [RightScale’s CEO] started to get interested in what I was doing, we didn’t spend a lot of time fantasizing about the future. He grabbed all the user email addresses I had collected and started talking to potential customers to find out what they wanted to do. Since then we’ve iterated on trying to provide our customers what they wanted next. That has allowed us to talk about what companies do in the cloud, why they do it, how they do it, what we’ve seen work and not work. In the end the skeptics get convinced because they see others reap the benefits.”

 6) You epitomize what I always tell my students – “A Humble Pride based on ethics and honesty is an entrepreneur’s strategic advantage, not a handicap.” Coming from the world of academia, did you feel you had to overtly fight the Hollywood stereotype that business leaders have to be greedy and vindictive to win?  

“In terms of honesty and ethics, I’ve found over and over that at the leading edge of technology it’s as much about setting and meeting expectations as about raw functionality. Especially with all the hype around cloud, it’s often a challenge but if we don’t communicate clearly what can be done vs. what is still a dream, we get burned in the end. It helps to think positive and focus on the awesome things that are indeed possible. Or to softly educate the customer using phrases like ‘I’m not sure this is a good idea, the way we’ve seen others solve the problem successfully is …’

In terms of the stereotype of vindictive and greedy [businesspeople], it’s something I just don’t want to believe in. Throw in some fear and it’s easy for anyone to land there. What helps me is to always remember the phrase about growing the pie as opposed to trying to get a larger slice. Apply it to all your interactions, whether with VCs, employees, partners, and even potential competitors. It’s contagious!”

5) It is 2015. How will RightScale’s value proposition differ from today and what will the overall cloud computing landscape look like?

“I’ve refused to paint a big vision or to predict long term. Some of that is very personal fear of failure or something like that--if you don’t put a stake in the ground you can’t fail to arrive there 8). Over the coming years computing will continue to evolve towards becoming a grid utility. We intend to continue placing ourselves as much in the midst of that as we possibly can.

One of the interesting questions I’m keeping an eye on is at what level users will consume compute resources, in particular, where in the spectrum between infrastructure as a service and platform as a service. The former gives users more flexibility using lower-level abstractions but perpetrates a lot of the complexity that makes many IT shops slow and expensive. The latter is a bit of a straightjacket that applications have to fit into, but there’s more automation, ultimately leading to lower costs and more agility."

4) You have a seemingly quiet demeanor, yet you are quite the prankster – your Citrix Online April Fool’s email prank still ranks as one of my favorites. What is your personal practical joke favorite?

"If I told you, it would impact my future prankster opportunities ;-) "

3) RightScale’s Culture of Celebrationis an ideal mix of fun and fanaticism. Is it hard to balance your work hard / play hard culture, especially in beautiful Santa Barbara? Have you attempted any employee morale initiatives that worked either especially well or surprisingly poorly?

“I often have a hard time to ‘let go.’ Fortunately Michael has a great sense of celebrating and having fun. Because we have employees around the world, we have all-employee meetings three times a year. Just getting everyone together for a week and having a healthy mix of work meetings and fun is incredibly empowering. We actually dialed back the time spent in ‘fun’ activities a tad to leave more room for brainstorming and other work activities. My favorite is the afternoon where we have a couple of customer or partner presentations followed by almost 20 lightning talks given by employees. These are 5-minute presentations on any topic related to RightScale and range from new technology demos to HR news and of course satire, making the entire audience howl. But the key is that from start to finish there is no top-down presentation by management.”

2) RightScale crossed the chasm pretty quickly from early adopters (Animoto and Zynga) to mainstream customers (The Associated Press and A&E Television Networks). What did you guys consciously do to manage this transition and how much of it was organic?

“To a large degree we rode Amazon’s coattails. But a lot of credit also goes to Chris Fowler, who built our services organization and was able to provide the kind of customer attention and support that the larger customers needed. New technology tends to have a lot of dark areas that the experienced users know to avoid but newbies step right into, so if you have a chance to guide them, the success rate is much higher. We’ve been very deliberate making services a cost center that focuses on referenceable customers. When push comes to shove, they do whatever it takes to make the customer happy. Obviously this has its own set of pitfalls, like papering over product defects, and needs continuous adjusting, but this basic orientation is so important and energizing across the entire company.”

1) Although it is not true, Santa Barbara is often knocked by the insular Silicon Valley crowd as a place where you can’t recruit top tech talent. You attracted one of the strongest executive teams I have ever seen, especially during your startup’s early days. What recruiting tips can you provide others who are building a world-class tech company outside of Silicon Valley?

“Luck has got to play a big role here! RightScale has been very frugal from the very early days when we were considering bootstrapping. We realized we had to keep this up and asked everyone to make significant financial and time sacrifices to join. I’m sure we missed out on a number of great people, but the net effect is that everyone in the team is focused on the same mission.

The ‘Santa Barbara effect’ has been interesting--we all have cute VC stories around that. Hiring is difficult no matter where you are. If you think everyone here is distracted by the beaches, I think everyone in the valley is distracted by the startup that just got funded next door. There are some people here you’ll find at the beach, some you’ll find at corporate 9-5 jobs, and some you’ll find on an exciting mission. Same everywhere. We also have a significant number of ‘cloudies’ [remote employees around the world] and we’re very active in using technology and travel to keep everyone together.

One thing you might notice is that everyone on the management team has been through a startup experience at least once before. We all had some vague idea of what to expect and some idea about what to do. Some of us have been living here for years and some just moved here. None of us were recruited to Santa Barbara by RightScale. ”

Liftoff: Rapid fire answers to various irrelevant questions:

Reading or watching a movie? “I like to read the end first”
Cats or dogs? “Freedom: neither”
Winter or Summer Olympics? “I used to ski a lot but now that I’m swimming regularly my answer has changed”
Chrome or Firefox? “Gotta stop the Google monopoly somewhere (I’m an Android fan, so they already know way too much about me)”
Risk or Monopoly? “Never played Risk”

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John Greathouse is a Partner at Rincon Venture Partners, a venture capital firm investing in early stage, web-based businesses. Previously, John co-founded RevUpNet, a performance-based online marketing agency sold to Coull. During the prior twenty years, he held senior executive positions with several successful startups, spearheading transactions that generated more than $350 million of shareholder value, including an IPO and a multi-hundred-million-dollar acquisition.

John is a CPA and holds an M.B.A. from the Wharton School. He is a member of the University of California at Santa Barbara's Faculty where he teaches several entrepreneurial courses.

Note: All of my advice in this blog is that of a layman. I am not a lawyer and I never played one on TV. You should always assess the veracity of any third-party advice that might have far-reaching implications (be it legal, accounting, personnel, tax or otherwise) with your trusted professional of choice.

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