Varsity CEO Summit Scaling Strategies CEO Case Study

Managing to a Successful Exit

Jon Shalowitz, CEO, XDN

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Corporate Overview Year Founded 2009 Company Overview XDN solutions enable enterprises to better manage and monitor how their applications are running across a heterogeneous (public/private/hybrid) delivery environment Product(s) & Delivery CrowdDirector– Cloud-based application delivery controller (LB) CrowdView– Data analytics on user-perceived application performance (plus, plus, plus…) Business Model Monthly/annual subscription based on query (traffic) volume processed or data delivered (CDN) Capitalization Venture seed/A rounds: $6.62M (Storm Ventures, Canaan Partners) Key Milestones Achieved Built 4 discrete revenue-generating product lines Monthly traffic volume ~5 billion queries, ~2 petabytes CDN traffic Key design wins vs. F5/Brocade and Akamai/L3 10x pipeline growth in final quarter before acquisition

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Company: XDN, Inc. Sector: Application delivery Primary Value Prop: Simple and cost-effective application acceleration Company Stage: Acquired Key Competition: F5, Brocade, Akamai, Verisign, Neustar

Acceleration Strategy– Cloud App Delivery

Why we chose this path

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Needed hand on ‘knob’ before could disrupt the content/app delivery value chain

Data value as great, if not greater, than the bit delivery

The Correct Answer: ‘You never have to change anything you got up in the middle of the night to write’

Saul Bellow The path to growth often relies on accepting the ambiguity (and

promoting it)

At the very least, cheap lead gen…

COMPANY CONFIDENTIAL

XDN provides a cloud-based intelligent routing control plane Design based on precepts of SDN, but works with any network, today

Global Network View

Network  Orchestra.on  Layer  

NR  1    

NR  3    

NR  2    

NR  4    

NR  5    

Network  Resources  

Resource Monitoring

Route Optimization

User Experience Monitoring

XDN Services

(control plane)

Customer Resources

(data plane)

CrowdDirector: Cloud Content & Application Delivery Controller

18  Global  POPs  in  US,  Europe,  Asia,  Australia  

Content  Delivery  Networks  

Cloud  Instances  

Local  Traffic  Managers  

GLOBAL  NETWORK  

Strategic Approach– Refocusing and Rebuilding

Give yourself ‘30 days’ Avoid urge to leak your thinking

Communicate/Act fast Understand the emotions involved

60 day refreshes

Quickly adapt to new data and new reality

Always check for the nearest (3) exits

Things change (+/-), don’t be caught without options or miss an opportunity

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The Sell Decision

Check your emotion at the door It’s a hard decision, don’t make it harder

Finding escape velocity

Sometimes need a bigger booster rocket in the near term

Don’t wait for your board to suggest it But don’t be too eager– be careful how how you socialize it

Don’t underestimate the emotional impact on the Founder(s) Not a reflection on their vision/dream

Once it’s a ‘go’, full steam ahead Do not waiver from the agreed upon course

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Master of your domain

Cast a wide net Sometimes the best exit is the non-obvious one

Criteria we used •  Strategic fit •  Organizational fit •  Product/Technical fit •  Commercials (output)

No place for pride Called all my competitors

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Managing a successful exit

The Simple Math 30/10/3

Overcommunicating/Undercommunicating

Board, execs, staff, suitors

Getting to Yes

360 degree assault

The Deal will Die 7 Times Your own sheer will and energy…

Care and Feeding Even post-closing

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Results & Learning

Be quick to learn and adapt Build your ground-truth and communication links Trust your instinct Pick the data you will use, even if imperfect

Don’t wait until your asked to find an exit Even during growth and success

Pick your partner Nothing wrong with playing the field

Communication can make or break the deal Who, how often, how much, tone, etc.

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And some very important closing thoughts…

Put yourself last

No one should feel at a disadvantage

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