Biz Lessons from Compellent

Yesterday, Compellent Technologies (NYSE: CML) had a supercharged IPO, with the stock price rising 43.90% to $24.19. 

The company develops sophisticated storage technologies primarily for the small to medium size business (SMB) segment.  In fact, revenues have more than doubled over the past year.

So how does Compellent standout from its rivals, like IBM (NYSE: IBM), EMC (NYSE: EMC) and Dell (Nasdaq: DELL)?

No doubt, Compellent has a strong management team.  And, its engineers have developed cutting-edge products.

However, there’s something else that’s critical; that is, Compellent strives to make its products easy to use.

Have you ever tried to use advanced storage products?  If so, you understand the concept of “customer pain.”

Actually, if you read Compellent’s IPO prospectus, you will see the following explanation of ease-of-use:

“We designed Storage Center to reduce the complexity associated with traditional storage systems. Our intuitive interface and integrated architecture enables even less sophisticated users to accomplish advanced storage tasks in minutes, by automating manual, time-consuming storage management tasks, such as volume provisioning, tiering, disaster recovery and boot from SAN. This enables enterprises to more efficiently deploy their information technology resources. According to an end user study commissioned by us and conducted by Enterprise Strategy Group, an independent third-party consultant, 98% of our end users surveyed were able to manage their SAN in three hours or less per week, while only 31% of other storage system users surveyed were able to do so. We believe that enterprises could purchase and integrate a number of different hardware and software products and still not achieve the functionality of Storage Center.”

Working with beta customers

This week, the Rubicon Project snagged $6 million (the lead investor is Clearstone).  In fact, after several months of intense development, the company is about to release the first version of its product.

Along the way, the Rubicon Project worked with a variety of beta customers. 

What was the process like?

“Actually, I think having a process is a bad idea,” said Frank Addante, who is the CEO and founder of the Rubicon Project.  “Having a process can lead to certain outcomes.   For example, at first we wanted to add a lot of features and allow customers the opportunity to customize.  But, it became clear that customers wanted a product that essentially worked on auto pilot.  They trusted our own decisions on what was important and not.  In other words, if we had a tight process, we might have missed this.”