We now have in our midst a startup success story that will hopefully inspire a 100 new software product startups in Pune.

PuneTech and the Pune Open Coffee Club both started about 2 years ago, and the steadily increasing memberships and vitality of these communities points to a very strong startup community in Pune. However, throughout those two years, one question always cast a doubt on the long-term potential of this startup ecosystem. And that question was: Where are the success stories?

Druva software (previously known as Druvaa) which just closed a $5 million round of funding led by Sequoia Capital answers that question. Of course, getting a round of VC funding is not as good an indicator of success as an IPO or an acquisition. And of course, there have been other successes in the past. But still this news is great, for the following reasons:

• Druva is a purely homegrown startup. This is not a company started by someone in the US setting up a development center in India.
• Druva is a product startup. It is not a services company. Hence, it has a potential for exponential growth and returns.
• Druva is not done by serial entrepreneurs. The co-founders are all first-time entrepreneurs who quit their big-company jobs to start Druva. This should give hope to all the first-time entrepreneurs in Pune.
• There haven’t been many high-profile successes in recent times, and this one comes as a breath of fresh air.

Druva has been one of PuneTech’s favorite startups. With 5 different PuneTech articles, this is probably the company that has received maximum coverage from us. And a quick look at the articles gives hints as to why:

• It is a product company, which is always more interesting than a services company; it’s especially interesting to watch the product evolve over time.
• It requires some very complex technology, not something that any company could easily build. Plus, they are happy to write detailed technical articles about the technology that underlies their products.
• It has repeatedly featured in high profile startup events in India, from proto.in to the NASSCOM summit

PuneTech spoke to Jaspreet Singh, CEO of Druva, over the phone, and here are some quick notes based on this conversation. There are a number of unique features here that other Pune entrepreneurs would do well to take note of.

On the current state of the company

Druva has $2.5 million revenue run rate, coming from about 400+ customer deployments. Most of this is from their flagship product, the inSync remote laptop disk-to-disk backup solution. Recently they also introduced Phoenix a remote server disk-to-disk backup solution. They have about 23 employees, most of them in Pune, with a few sales people elsewhere. The product is developed entirely in Pune.

How do they manage enterprise support for 400 customers with such a small employee base?

Although supporting their customers is a very high priority for Druva, one of the things they focus on very hard is to make the product very easy to use and very easy to support – so that to a large extent, most of their customers don’t really require any support. They have a “release often” philosophy which ensures that customers always have the latest, bug-fixed, version of the software.

Another area that they put a lot of effort in, is in ensuring that the product is easy to install. A lot of their customer testimonials speak of how easy it was to self-install the software. By contrast, the comparable software from the more established players in the market requires professional services help for installation.

How do they manage sales without a strong US/Europe presence?

Instead of the tradition of hand-holding that is a common feature of enterprise sales in this domain, Druva decided to go a different route. They made their software freely downloadable from the web, and made it easy to install and try. As a result, most of their customers approach them after having first tried the product out via the website. And many of their sales, even large ones, have happened over skype/email, with no in-person customer visits.

How do they compete with the large MNCs, the established players in this market?

We were very surprised to learn that Druva does not try to compete with the incumbents on cost. Jaspreet told us that in fact the average Druva sale tends to be 3x more expensive than the comparative offering from the established players. Druva scores on ease of use, simplicity, and most imporantly, the technology.

Jaspreet points out that one of Druva’s strong points is the easy-to-use source-level de-duplication. Which means that when backing up a laptop, they can ignore duplicate content even before the data is sent to the remote backup server. Specifically consider the gigabytes of windows operating system files on your laptop. Most of these files are likely to be identical across all laptops of a company. Druva’s software would know beforehand that there is a copy of those files on the backup server, and would never send it across. Such optimizations ensure that backing up 15 TeraBytes of data from a number of different laptops just results in about 2 or 3 TeraBytes being send across the network. This results in an increase in speed, reduction in network bandwidth consumed, and in disk-space consumed.

By contrast, traditional backup systems do de-duplication at the destination. Which means that all the data is sent to the server over the network, and only then is the server able to remove duplicate content. This means that the speed and network bandwidth improvements are lost.

Also, claims Jaspreet, Druva’s backups are fully searchable – a feature that is not available with most competitors.

What is their primary challenge currently?

Jaspreet says that they want to build a high-quality, world-class product, and for that he needs lots of high-quality, world-class people. While they’ve obviously managed to build a team like that which got them so far, they need many more such people in the coming days, and that’s a significant challenge. He says that it is difficult, if not impossible to find “readymade” world-class talent here (even when “world-class” salary and/or equity is offered!). Instead, he feels that the only approach that works is to find individuals (whether freshers or industry veterans) who have the right attitude and potential and then nurture them into the required shape.

(As an aside, we’d like to point out that is a pattern. Pretty much every startup we talk to mentions hiring of high-quality people as one of their primary challenges. This is a problem that needs a solution, and I’m hoping that some entrepreneur in Pune is looking at this as an opportunity.)

Parting thoughts: In the Druva co-founders, we have people who have been through the entire process, from zero to VC-funding, in Pune, recently. And they are nice guys. Pune entrepreneurs should take advantage of this, and flock to them for guidance, advice and mentorship.