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$5.6B cloud company Fivetran acquired its way to survival
- uo21tp5hoyg 4y agoIt seems every day I come across a new billion dollar tech company I've never heard of before. Their sites always have a ton of well known companies under their "Trusted By These companies" banner too, and always seem to include NASA.
- linspace 4y agoEngineers are frequently not entirely honest in their CVs, I wouldn't expect too much from the marketing department of a company.
- laingc 4y agoFivetran is absolutely in the category of product that might be in use at NASA. They are a very well-known technology in the data engineering world.
- higeorge13 4y agoMarketing will use zapier, fivetran is for data engineers.
- jerglingu 4y agoFivetran has been diligent the three years I was tucked away in FAANG analytics. When I emerged earlier this year back into the world of normal companies, I realized there was a sort of holy trinity of companies that has completely dominated the analytics SaaS market: Fivetran, Snowflake, and dbt. I had only heard of Snowflake before.
- adammarples 4y agoDbt is actually fishtown analytics, and I would add databricks to that list
- rorymalcolm 4y agohttps://technical.ly/startups/dbt-labs-series-c/ https://technical.ly/startups/dbt-labs-series-c/ They changed their name semi-recently to dbt Labs
- mastazi 4y agotangentially related: if I'm already using Fivetran, DBT and Snowflake, where does Databricks fit in? From reading their marketing material, it would seem that Databricks is a full featured solution that replaces all of the above and offers everything from ingestion to ETL and even analytics. However I keep hearing of companies using Databricks alongside those other products and I don't understand how does it fit into that type of data pipeline.
- hulahoof 4y agoA lot of people use databricks for the analytical and ML workloads (leveraging it as a sort of extended spark environment)
- kthejoker2 4y agoDisclaimer: I work at Databricks. Databricks is more of a platform than "just" a tool. So yes we offer first-party "end to end" solutions, and we're happy to show their value to you and convince you to pay for them, but we play nice with others, and we have a ton of great partners who can connect into our platform and help you ingest, transform, analyze, and consume your data. So you can use our native ingestion tools, or partners like Fivetran; our native ETL/ELT tools, or dbt; our native SQL/BI/warehousing capabilities, or Snowflake. The metaphor Andy Kofoid our VP of Ops uses is XBox or Steam. They're a platform others can build things on, but they also sell their own games and offer value-added services on top of the things others are selling. And like those platforms, we have the same ultimate twin goals of attracting customers and partners.
- benjaminwootton 4y agoIts a great stack and works well together. Ingest with Fivetran, transform with DBT and store in Snowflake. Simple, serverless, consumption based pricing etc. definetly better than the old ETL world!
- ckdarby 4y agoWhat about Palantir?
- fshbbdssbbgdd 4y agoI remember when Fivetran came out years ago and it was a big improvement over the competition at the time. It made a particular kind of work easier, so you would hopefully know about it if that’s what you did for a living. I’m in a somewhat different speciality now so no idea how things have developed since then.
- xnorswap 4y agoHuge enterprises are often made up of thousands of sub-domains with relative freedom to choose different technology. It's actually useful to remember if you're a start-up chasing a contract with an enterprise. You might bend over backward accommodating BigCo to get their name on your books thinking you'll make it huge once "they" start using your technology only to find it never actually gets further than 2 people in Sub-Department-Offshoot, and while you might get to use that fancy logo on your marketing material, you'll wonder if the concessions and vastly undercharged overwork was really worth it because the payday of actually having BigCo use your tech throughout their stack never materialised (because it never really does, but it'll be endlessly dangled in front of you to get you to agree to put in a bunch of features for free).
- groundthrower 4y agoSo much this
- ra120271 4y agoI agree. For many BigCos this is not an active intent of malice. Often the 2 people do hope their vision will change the company. However, the company is often filled with these groups of "2 people" all trying to move the needle also, leading to a single vision not being effective. My advice is have an honest and frank conversation with BigCo. Let them know it is in no one's interests for your start up to go out of business, and when they are doing at things at scale you (startup owner) can discuss passing on those economies of scale in terms of dedicated work, discounts, etc.
- mrtksn 4y agoIn my experience, there's actually gold to be dug from that relationship. The people who spend money in these BigCo don't spend their own money and their motives are structured way differently than what would be in a small business. The BigCo can actually pay you big if you can improve the career and boost the ego of those who will make the decisions. To do this, you need to give people something that they can present to their own managers in a very positive light so they can present it to their own managers. That's how you can build a momentum of people who can push for purchase of your product. From what I'se seen, making the life easier of some technical employees is not good. Think putting something trendy in it that the managers would love to boost about it. Could be a trendy tech(big data, AI etc.), could be social proof(Apple and Nvidia are also buying from this company). Just try to structure your marketing(which roughly means finding your customers, not to be confused with advertising) in a way that matches the incentives of people who don't spend their own money but try to work their way up in structured relationship. Of course, your product should also accomplish something so you can have a long term business. So it's not a fraud, it just needs right kind of engagement.
- hnhg 4y agoIs this a rags-to-riches overcoming-the-impossible story where the protagonist is already unfathomably rich and well connected at the outset and could buy their way to success? Not sure how much I can relate to that, tbh.
- fnands 4y agoAs soon as I read "whose family also summered in the same patch of northern pines" I knew where this story was going. Basically read as: we started a failing company then used family connections to raise a fuckton of money to buy a successful company, and now we're successful.
- acjohnson55 4y agoI'm sure these founders grew up at least middle class, but you definitely don't need FU money to summer in the northern pines of Wisconsin. It's not exactly the Hamptons :)
- Jotra7 4y ago
- qualudeheart 4y agoDo they use Fo(u)rtran in production?
- rajnathani 4y agoFivetran’s founder frequents the HN comments section. It would be interesting to read their comment on this thread!
- deleted 4y ago[deleted]
- debarshri 4y agoSomewhere buried in the article is Airbyte's valuation. For a 1 million in revenue they had a billion dollar valuation. That's like 1000x multiple. Is it because they are open source?
- iamacyborg 4y agoTheir deck is hilarious, talks about their single digit thousands strong Slack community as if that’s something to brag about.
- Mandatum 4y agoWow you weren’t kidding. Finally a startup in a field I know about. This is a bubble.
- deleted 4y ago[deleted]
- emrah 4y agoI think it's because there are investors desperate to get into this industry but can't invest in 5T et al, so they invest in whatever they are able to hoping they'll capture some of the uplift
- swyx 4y agosome other data points https://twitter.com/search?q=from%3Achetanp%20airbyte&src=typed_query https://twitter.com/search?q=from%3Achetanp%20airbyte&src=ty...
- dataengineer56 4y agoDumb valuation aside, Airbyte seems like it will wipe the floor with Fivetran and other pay-per-record data pipelining tools. Open source, decent community, you can host it yourself... Orders of magnitude cheaper.
- laichzeit0 4y agoI have a weird vibe with Fivetran, Snowflake and Looker together as a combo with their credit based billing. Those three tools provide a platform that makes it easy to forget about engineering things correctly and just throwing money at the problem. It’s makes it so easy to do really dumb expensive things. LookML is another “lock in” type product (much prefer using DBT with a Data Vault model). Once you’re knee deep in LookML you’ll have a hard time switching to another analytics tool. Snowflake makes it so easy to do massive compute that your badly designed data models won’t matter. Fivetran is really cool though, but you need to be careful about getting into bed with all 3 those products at once.
- iamben 4y agoYeah, we've found some of their (5T) competitors (who bill by connector) make far more sense for certain services. Love fivetran, though.
- brainbag 4y agoWho else do you use? Fivetran's syncing has been very reliable (compared to others we tried) but the "active row" based pricing is unpredictable and can have huge spikes in billing costs. I've been waiting for reliable competition with compute- or size-based pricing.
- iamben 4y agohttps://dataddo.com/ https://dataddo.com/ They've been very good to us, definitely recommend. Reach out to gabriel.giely@ - he's very helpful.
- swyx 4y agofor what its worth, we've been offering compute based pricing at Airbyte, and recently published our learnings here https://airbyte.com/blog/introducing-volume-based-pricing https://airbyte.com/blog/introducing-volume-based-pricing does this match the size-based pricing you are thinking about?
- hackernewds 4y ago
- mjfl 4y agoSo they are basically a SPAC
- parkingrift 4y agoThis is basically a story of well connected people who used their connections and existing wealth to buy their way into a market. I truly despise this “method” of building a business, and I doubt it will lead to long term results. These guys apparently had spent $160 million and according to the article, had “no product here.” It’s perplexing to me that they were then able to so easily raise hundreds of millions of dollars to buy competitors that did have a successful product. And this was barely a year ago. Why do investors believe two failed founders will be able to grow and scale this business when they couldn’t grow and scale their own business? I’ll personally make sure to avoid this company as I don’t at all respect their method for creating a viable “business.”
- nfhshy68 4y agoThey took 160m and turned it into a 5 billion dollar company... And that's not success to you?
- Retric 4y ago160m + “$565 million to bankroll the deal.” Anyway the company “forecasts $189 million in revenue this fiscal year” how on earth that translates to a 5.6 billion valuation is anyones guess.
- oblio 4y agoValuations are generally a multiplier of yearly revenue, which makes sense. Valuations are, on paper, what you'd buy a company for, and in the old school look of things, how much the company made per year was a good metric, and you'd multiply it by several years, since you'd probably not buy it as a super short term investment. Now, the actual multiplier values used for that... we can debate them for ages :-)
- Retric 4y agoOld school valuations are based on profit not revenue. Which inherently avoided selling dollars for pennies. Valuations based on revenue are essentially arbitrary because they are always based on models of potential rater than actual performance.
- Linda703 4y ago[dead]
- jumperjumper 4y agoUnrelated to the article itself but Fivetran has the worst possible product from a developer perspective, their APIs are unreliable and will fail on you randomly. I understand the dynamics of articles in Forbes (the successful entrepreneur making his way to success, lots of them are paid for.) but most such companies have such shit infrastructure and APIs, I wonder if people are only paying because they're locked in or their non-tech clients use this stuff.
- gadders 4y agoThis looks like the launch announcement: https://techcrunch.com/2013/03/19/yc-backed-fivetran-launches-a-smart-online-spreadsheet-for-data-analysis https://techcrunch.com/2013/03/19/yc-backed-fivetran-launche...
- smohare 4y agoFivetran is so massively overpriced for the service they provide.
- deleted 4y ago[deleted]
- jack_riminton 4y agoThis reads more like a dotcom bubble exposé than a success story
- bitcurious 4y agoBe careful with fivetran - they inflate your data and then bill you for it. In our case, they inflated by ~10x the record count by doing a join between two tables/endpoints which wasn’t required for data integrity. (I.e. there was a “balloons” endpoint and a “parties” endpoint and fivetran synced a non-existing “party_balloons” table.) We dumped them once our first credit purchase ran empty.
- stephendv 4y agoWe have been with them for 2+ years and are moving away from them. Great product but absolute nightmare on pricing transparency. Every year the contract is a fight with their bait-and-switch. Every year they try and double our price saying they changed their pricing model and we have not increased usage. Sales people are horrible and don't trust them at all. If you are a small company with a tight budget I'd stay away.
- swyx 4y agowhat did you go for instead?
- liveoneggs 4y agoStitch can do a lot of the simple replication stuff for cheaper. Fivetran, apparently, is going to change their bonkers billing stuff (only 2-3 years old iirc) because they are losing customers over it.
- swyx 4y agooh i didnt know that. has the billing change been talked anywhere or is this rumor for now?
- liveoneggs 4y agohttps://www.fivetran.com/blog/fivetran-pricing https://www.fivetran.com/blog/fivetran-pricing
- 4y ago
- snidane 4y agoAll of these visual ETL tools are nothing more yhan a patch to the new breed of analytical databases because their support for loading files sucks so badly. Even the praised dbt is just a hack to make declarative incremental because the SQL capabilities of these databases is also bad and you need to template out your way in. There will once be a SQL database that will make these things not suck and collapse this entire hot space of startups for data loading and missing features in Snowflake. Snowflake will go away too if they keep ignoring so many "missing features" startups and not improving their loading or language capabilities. Unless they intend to spin up an ecosystem of "hacks" to complement Snowflake to make it usable, which is another reason for some saner system to displace them.
- swyx 4y agoYou mean like https://www.fivetran.com/files https://www.fivetran.com/files and https://docs.airbyte.com/integrations/sources/file/ https://docs.airbyte.com/integrations/sources/file/ ? what do you mean by "support for loading files sucks so badly"?
- fphhotchips 4y agoDisclaimer up front: I work for Snowflake but do not represent them here - I'm not in Product and have very little influence over direction. What language and loading capabilities would you like to see us add? I personally doubt we'll ever aim for postgres levels of extensibility, but Java has been in for a while and Python just went public preview - with great reviews from everyone I've spoken to. Plenty of activity on the loading side too, although we don't really aim for visual ETL - you're pretty much correct that we're happy to let 1000 flowers bloom in that space.
- rawgabbit 4y agoSimple way to consume Oauth2 REST APIs on a schedule.
- cbm-vic-20 4y agoWait until you hear about sixtran.
- mathattack 4y agoAmazing that they could get $500+mm at a valuation of $5+ billion to buy a company with revenue of $30mm. Times have changed since then!
- mathattack 4y agoAmazing that they could get $500+mm at a valuation of $5+ billion to buy a company with revenue of $30mm. Times have changed since then! I wouldn’t look at this as a guide for today’s market.
- abadger9 4y agoI almost joined fivetran as a staff engineer, I had a terrible experience in the hiring pipeline - the manager i spoke with was convinced he was sounding clever by asking someone with 10 years of experience the difference between a java hash table and hashmap. Also the scope of work offered was at the level of a early senior engineer, i felt the vibe this company stagnated 3 years ago.
- spullara 4y agoFivetran created a great mid-market product that was best in class and had wide adoption. What they didn't have was a very customizable product designed for large enterprises where their one size fits all strategy doesn't work. That is what the acquisition was about, getting that product so they could serve both markets.
- blackNobul 4y ago