Growing Up in Technology: Entrepreneur Greg Arnette

Paul: We’re here today on the Edge of Innovation. We’re talking with Greg Arnette, the founder of Sonian.

Yeah, isn’t that cool?

Greg: Yeah.

Paul: Isn’t that cool?

Greg: Retro.

Paul: Yeah. It is.

Greg: I was looking on eBay for like the old-fashioned one but didn’t even know they had these available.

Paul: Yeah. It’s amazing how big the economy is. I’m always surprised that there is a machine, a factory somewhere making it. We’re talking about the “On Air” sign here in our window in our studio. It’s amazing how many things you can get, and that there’s a sustainable economy that consumes them all.

Color Kinetics

Greg: Everything is being reinvented around LEDs as well.

Paul: Right. Exactly. Well now, you were interested, really, in LEDs back when… What, who was the company in Boston?

Greg: Color Kinetics.

Paul: Yeah, Color Kinetics, and you did that in your house.

Greg: I did. Yeah. A long time ago.

Paul: Is that still the same house now? Are you still in the same house?

Greg: Yes. Back then, that would have been the early 2000s.

Paul: That was really cutting edge.

Greg: Make a big leap, a big investment in Color Kinetics, LED lighting for cove lighting and color changing and that kind of stuff. Now it’s everywhere.

Paul: Was it worth it, having made that investment?

Greg: Yeah, yeah. Learning curve. It’s funny. The equipment I put in, now going back to around 2003, 2004, is considered ancient right now. And a couple of the transformers have burnt out and just… Because this stuff wasn’t designed… I mean, it was mass-produced but in limited quantities for professional lighting installations, and I’m kind of a tinkerer around electronics. So I’m taking them apart and had to kind of cobble together replacement stuff from existing parts and sourcing things on eBay because the transformers aren’t available anymore. If they are, they’re really expensive. But I was fortunate to come across a collection of newer generation replacement parts. I mean, lighting fixtures and transformers. So one of my weekend projects is to rip out the old and upgrade myself.

Paul: Wow. Now is Color Kinetics still a viable business? Are they in business, or have they gone out?

Greg: No, they’re there. So they were acquired by Philips, the big lighting. And you probably know some of their technology as Philips Hue, which is becoming really popular because these are more individual discreet light fixtures, LED-based. They do full-color spread from cool white, warm white, all the way to RGB. And you can control them with Alexa and your smart phone and web apps, and they plug into all the latest generation of smart home technologies and hubs and stuff.

Introduction to Greg Arnette

Paul: So we’re here today on the Edge of Innovation. We’re talking with Greg Arnette. Currently, you’ve got a new title, but I’m going to call you the founder of Sonian. Is that fair?

Greg: That’s fair. Sure.

Paul: Okay, but some stuff has happened. And we’ll get into that and all that. But you’re an entrepreneur of a long time, pretty much probably your whole life, I think.

Greg: Yeah. It’ been 30 years, I think, of thinking about ideas in the tech space, creating companies that solve problems and moving on to the next thing.

How It Began: Growing Up In Technology

Paul: So when you grew up what were you interested in? Were you a bookworm? Were you a sports person? Were you a nerd like I was? I loved technology and cool things. What was that like for you?

Greg: Yeah, definitely a self-categorized nerd, interested in electronics, technology of the era. I grew up in the ’70s and the ’80s, so a lot of it was analog stuff that I was tinkering around with. I got influenced by a grandfather who was into ham radio, and I got my ham radio license back in the 1970s as a teenager and kind of tinkered around with radio electronics for a lot. You had to learn a lot of radio electronics to get your license, as well as Morse Code. And that evolved into early interest in computers. And so some of the early computers that our generations remembers – like TRS-80s and the Texas Instrument little computer…

Paul: What was your first computer?

Greg: It was something out of England called a Sinclaire, I think.

Paul: It’s mine too, mine too.

Greg: It was a little teeny, almost the size of a book.

Paul: ZX80.

Greg: Yeah. It’s the Sinclaire, and then in high school, we were fortunate. I went to a high school that, it was in Haverhill High School, very large high school for the entire city. And the data processing for the whole city was actually in the high school. So we actually had access to a large amount of computer resources, including IBM, System 360s and TRS-80 labs, and stuff. So I got to tinker around a lot with that kind of stuff.

Paul: So I did similar things. I was very much into audio and electronics and building audio components and stuff like that. And computers, I got the ZX80, and it was, “Oh, this is school. You know, this is neat.” Was there an inflection point there that made you choose computers? Was it just technology in general? Are you a computer nerd or are you a technology nerd, I guess?

Greg: I would say technology focused with most recent time is spent in the computer realm or information technology realm. I had an uncle who was, I think a vice president of engineering at Prime Computer back a long, long time ago when that was actually a name that resonated in this area. And he hooked me up with a terminal that we could have in the home so I could plug into their, what they would call, a mainframe and got to dabble in languages like FORTRAN and stuff like that, which was what people would be doing back in the–

Paul: But you had it at home.

Greg: Right. Which I got to use very little of it because it tied up the one phone line we had. At that time, even a call down into…from where we were up in the North Shore into Boston would have been a toll call, so it was fun, but I didn’t get to maximize as much as I could.

Paul: I’m sure when the phone bill came, they’re like, “Greg, what are you doing? What’s going on?” Wow. That’s cool.

Greg: Yeah. So, I enjoyed that for a while. So I had some opportunistic, early access to technology from some family inputs. My father and my family, in general, wasn’t into technology per se, but they’re very entrepreneurial in other kinds of business, mostly in chemistry and chemical stuff. But I didn’t really gravitate towards that myself and got kind of tied into electronics and tinkering around and building stuff and that kind of thing.

Paul: Do you know the right end of the soldering iron to hold?

Greg: Yes. Yeah.

Paul: Okay so you’re that level, because some people are like “I don’t know what to do with a soldering iron.”

Greg: Yeah. I was fortunate, when I was growing up, to just fall into things, that situations that were very interesting to me and also financially lucrative. So in high school, my high school part-time job was to work for a local electronics company that manufactured emergency lighting systems, the kind of things you’d see in the corner of a building when the power goes out. And so I was working on the assembly line manufacturing PCB boards or diagnosing problems. And eventually I was actually managing people, which is kind of funny as a high schooler. But it was the perfect job. It went from two in the afternoon until five and didn’t have to work on weekends. At that time, all my friends were working at the supermarket, and they had to work at nights or on the weekends, and so it lined up nicely.

But I got to learn to solder and how to take things apart and use those solder pumps.

Paul: Yeah. A solder sucker.

Greg: The solder sucker to take away the–

Paul: Foop, foop.

Greg: So I pride myself on a nice clean…

Paul: Exactly. I don’t know why I’m saying this. I was on YouTube the other day, and a video came up that they said I’d be interested in. And boy, were they right. It was how to properly tin and clean your soldering iron. I’m like, now that’s really geeky.

Greg: That’s a skill. Yeah.

Paul: It is. It is.

Greg: Undervalued skill these days.

Paul: There’s a YouTube video with 165,000 hits on it, which is amazing to me.

Greg: You could get an entire education on YouTube right now.

Paul: Yes, you can.

Greg: On almost anything.

The Beginning of a Technology Career

Paul: So, you went to college?

Greg: I did. I went to U Mass-Amhurst.

Paul: And what was your degree?

Greg: I was able to do a bachelor’s degree in individual concentration. So it was a blend of liberal arts and computer science, so it wasn’t traditional.

Paul: And so what was your goal? Did you want to be a programmer? I mean, computer science?

Greg: Yeah.

Paul: They didn’t have a lot of things to offer back then, I’m sure.

Greg: No, this would have been in the early ’80s, and there really wasn’t a computer science major back then. Most people were, if they wanted to go into computers, they were doing electrical engineering or mechanical engineering and I started off as a chemistry major and then just kind of got bored with that. And then physical chemistry kind of killed me. I said this is not what I want to do. So switched into a combo degree. U Mass was so big, you could design your own program, and you had a sponsor or thesis guide who took you through it.

I thought I would probably do something like tech writing. I don’t know. I don’t know what I was going to do.

Paul: So what was your first job out of college?

Greg: So I was fortunate. Again, I stumbled onto something and so, I’m a really big belief in the Law of Attraction, so I must have been thinking about this, and I manifested it somehow. I got an internship my last semester, for a company in Woburn that was called ABC Software. It’s job was, basically, back then, was to help people leverage the 1-2-3 spreadsheet. So ABC123. It was kind of like a kind of a hokey name but that exposed me to PCs and business. I had never seen that realm before. So I was writing tech manuals for their software, and then that turned into just doing everything for them. They offered me a job when I graduated college, so I just segued right from the internship into full-time employment. And this was pre-days of VC and so forth.

So this company hooked up with Businessland and basically was the installation unit for all the IBM PC sales in the mid-1980s. That turned into local area networking, Novell Networking, and I just kind of just kept following that path and was mostly working on the side of IT that was helping small and medium-sized businesses implement technology for the first time. So a lot of early PC networking, little custom programming jobs here and there in dBase III. Remember Clipper and dBase III?

Paul: Yes, I do. Yes. Did you do Clipper work?

Greg: Yeah. These little teeny apps that they were kind of fun. Right?

Paul: And they were lightening first in Clipper compared to dBase. That was always the astonishing thing to me.

Greg: Right. And then I kind of got involved in what was called then 4GL programming –this platform called Clarion.

Paul: Oh wow. Yeah, I haven’t heard that in years.

Greg: Yeah. Anyways, that just evolved.

Paul: And this is in ABC?

Greg: No, no. This is after that.

Paul: Oh, so after ABC. I want to get that transition. So you were at ABC, “corporate” America? Was it a mom-and-pop? Or was it a…

Greg: It was two 30-ish guys that got together.

Paul: How many employees at that time?

Greg: Oh, it was just like 15 people.

Paul: Okay. Well that’s a decent number. But, it was a small company. So they weren’t trying to compete or be like Lotus 1-2-3. They just used the name, and they had some connections with Businessland.

Greg: And they also developed an application that helped – I think it was funeral homes – manage something. I didn’t get too involved with that. So they were doing lots of different things. They eventually got onto the Lotus Notes bandwagon and were doing all kinds. Since I left, they got into Lotus Notes.

Paul: So why did you leave there?

Greg: I just wanted to sort of scratch some different itches, I guess, so to speak. And the opportunity to grow in that environment was, I could see it was going to be limited.

Paul: Sure. Small company.

Greg: And I left there. What did I do? I left there. I went to work, for…At that time, PC Week Magazine was just becoming really popular, and I took a job as their network administrator internally and did that for a very short period of time. I realized it wasn’t what I wanted to do. I didn’t want to work for a specific company just doing network administration.

At that time, they were on a three-com network, which I wasn’t interested in. So I left that and then went to work for another company doing kind of internal IT. After that, went to work for a, I guess you would call it a PC network reseller back then in the early ’90s that was servicing all the law firms around Boston. So I got involved in a lot of technology around, upgrading like old-style Wang systems into modern – back then – modern PC-based LANs, word processing, and email. And then I got kind of got into the email theme and have been kind of riding the email now since then.

Starting a Business

Paul: Right. So then what was the, the change or the inflection point that occurred that said “I’m going to start my own business”?

Greg: So that consulting company got acquired by another consulting company. I worked there for a while focused on mass email and groupware. Back then, we called it “groupware,” specifically like exchange and Microsoft Exchange, Novell GroupWise, Lotus Notes. It really just resonated with me. I love technology that helped people communicate efficiently with each other. And I loved seeing how the implementation of an email system in an organization that didn’t have it before changed a lot of ways people thought about technology and getting rid of paper-based memos and going to electronic messaging and so forth.

Paul: Now I know, just as an aside, you were a big fan of GroupWise.

Greg: Yeah.

Paul: I was too. I loved the client. I liked the whole infrastructure, but that could be a whole episode in itself is just to talk about how that whole world changed. But anyway, so you were doing this for this company, sort of their messaging expert, I guess.

Greg: I was. Yeah.

Paul: And then, what happened?

An Entrepreneurial Background

Greg: That company got acquired. At that point, I was reflecting upon myself, and I wanted to do my own thing. I didn’t want to work for anybody, or I didn’t want to–

Paul: Where do you think that came from?

Greg: in my genetic code. My father is the same way. We’re entrepreneurial kind of background. My father’s a serial entrepreneur. I grew up in that environment. It didn’t scare me, the risk taking.

Paul: Are all your siblings entrepreneurs?

Greg: I have three younger brothers. Two of us are and two of are aren’t.

Paul: Okay, well that’s good. So, it’s there. So what were you going to do? What was the opportunity?

Alertware and IntelliReach

Greg: Yeah, the first thing I focused on was looking at email and messaging and seeing that as a consultant in that space, I was solving the same problem over and over. So I thought I’d productize this thing. And it was around, is the email system working? What’s the health of the email system? kind of stuff. So that turned into let’s design some software to make that a product and created this company called Alertware that was an email monitoring system back in the mid-1990s. And it was very successful from totally grassroots. I hadn’t known how to do anything, and that company got acquired by another bigger company called NetPro, which was out of Scottsdale, Arizona.

At that time, NetPro was the leading Novell third-party addon. They had all these things for e-directory.

Paul: Yeah. Now that you mention it, yeah.

Greg: So they renamed the product called Mail Central. And I didn’t go with the acquisition, so that funded my ability to create another company that was called IntelliReach. Initially, IntelliReach was looking at doing something around PalmPilot, because at that time, I was really interested in the PalmPilot, and I thought it was kind of a big business use case and so forth. So I didn’t find a way to make some money on that in the early days and reverted back to a theme I know, which was email. And then IntelliReach started to do things around email – email reporting, analytics, health, that kind of stuff.

Paul: Very cool. So now, you’re a CTO in general – a founder, CTO. How would you categorize yourself? Is that fair? You’re a CTO?

Greg: Yeah. Founder/CTO type. Yeah.

Paul: And so why didn’t you go towards the business president kind of thing?

Greg: In the early days of both Alertware and in IntelliReach, I wore lots of different titles as the company morphed from early days to getting sort of more mature, and I felt my best being true to myself, my best contribution to the project would be focus on technology, align myself with someone who could handle business, and become a pair and go work together.

Paul: Well that’s worked pretty well for you, I think.

Greg: It has, yeah. I think in hindsight, I probably was putting some limiters on myself that I didn’t need to because I had not seen like a pattern where “Oh I can do business as well as technology.” So just in terms of things of how do you create a sales team, how do you do marketing… I self-limited. I said, “Oh I could never figure that out. I’ll just let someone else do it.” Now if I were to start something, I would be in a different role, I think.

Paul: Alright. So you started IntelliReach. That’s how I met you. You actually acquired one of my companies, which was a great experience and worked with you for several years.

Greg: It was great.

Paul: So you sold IntelliReach.

Greg: Yeah. IntelliReach was acquired in 2005 or 2006. I can’t remember now. Around there. And similar situation – I did not go with the acquiring company. I just had no interest in working for a multi-thousand person organization and it just wouldn’t have been a good fit for me.

Paul: Did you have an idea already?

Venture Capital

Greg: No. At that point, I was kind of burnt out from the experience. It was my first dabble with venture capital.

Paul: Was that thumbs-up or thumbs-down for venture capital?

Greg: It’s to be blunt, thumbs-down. It wasn’t a great experience. Hindsight, it was the wrong investor type. It was a company that was more focused on media and communications, and they wanted to get into software as service. And so that was what IntelliReach was going to morph into, was software as a service business after being kind of a software and appliance based. But the company that acquired the technology and the employee base took it further and did okay, so…

Thoughts on Amazon

Paul: So, you were burned out on that. So what did you do? Go to the beach or…?

Greg: I did. Yeah. So at that point, I was fortunate to have built a house in Cape Cod and took three or four months off during the summer, got very healthy, long walks. This was now 2006, I’m pretty sure and, got some clarity on stuff. And I have a very kind of wide-angle, nonlinear thinker around trends, technologies, what’s next, and started to notice this thing called Amazon S3. And I’m like “What’s Amazon the bookseller doing with this cloud object store kind of thing?” And just started thinking, “Wow, there’s something here. I’ve got to figure this out.” So, that sort of became the next project, it was around cloud and Amazon.

Paul: So what were your thoughts about Amazon? Because it was, okay, what’s a bookseller… I had the same thoughts. It was like “What’s, what’s going on?” And, and then it turns out, as you pull the covers back, it was like “They did some serious work here.” I mean, it wasn’t just an initiative that was going to die, like “Oh the marketing people came up with an idea, and they’re going to put it up on paper, but it never turned into technology.” But Amazon seems completely counter that. The technology they built is rock solid.

Greg: Yeah, it was very unconventional. And sort of a pre-story to that is, during the IntelliReach days – and I’m not sure if this is after you were involved or not. I’m not sure. But, we had been talking to Sun Microsystem around deploying our software on what they were called the utility computing network, what pre-cloud. Utility computing was pre-cloud. And we spent six months with them, with a team up in Burlington, Massachusetts where Sun had an office. They were going to set up, basically, an environment that we could deploy our software, and it would be a dollar per CPU hour and a dollar per gigabyte per month, which seemed compelling. But when you actually did the spreadsheet analysis, it was still cheaper to go buy your own hardware, go rent a colo cage at a hosting center and just keep doing it the way we’re doing early, hosted applications, which is you own the entire stack, including the hardware, the networking layer – everything.

So we couldn’t make the economics work, but boy, I was really excited about the idea of not having to even worry about infrastructure and just focus on software and the problem that I could go solve for the customer. So when I saw Amazon S3 become available about a year later, I think at that point, it was 15 cents a gigabyte per month for like world-class storage, really good resiliency SLA and durability SLA. I was like that’s the game changer here in terms of being able to go do something.

The question I had was, would anybody take that seriously? Would a business actually trust–

Paul: A bookseller?

Greg: Yeah, the bookseller, to store their data – whatever it is –on behalf of a software as a SaaS application.

Paul: Okay so then you’re, so you’re, you’re on the beach relaxing and you hear about Amazon S3 and you’re like “There’s something here. I’ve, I’ve got a utility here.”

The Building Blocks: Rudy on Rails and Amazon

Greg: Yeah, there’s, there’s, there’s something here that I think is going to… Just an intuition. It was like, this is going to be big. The price points are too compelling to walk away from – pay as you go; pay with a credit card; pay for what you use; super simple. The API was really easy. And sort of take that with another thing that I was paying attention to which was Ruby on Rails, one of the first web application frameworks that sort of sponsored this idea of, again, sort of, if there’s sort of this undifferentiated aspect of building something, just let the framework take care of that. Don’t reinvent the wheel every time. Right? How many times do you need to reinvent a way for an app to talk to a database kind of stuff? Or to deploy an app. So a combination of dabbling and Rudy on Rails.

I took a, like a couple day intensive programming course in New York City over that summer. And I met someone from Boston who was down there. We started comparing notes. And he was working on something that was Rails related and also talking about Amazon. He was like “Hey, there’s something going on here.”

So Amazon and Ruby of Rails, we kind of bunched those together. They weren’t designed for each other particularly but just they were two nascent trends that I just felt they were going to become more popular. And they did. Rails is now, kind of, I think, on its…

Paul: Its horizon. It’s sunsetting almost. It’s like wow.

Greg: Exactly. Things are happening really fast. Right? But for six, seven years there, it was like the thing and alongside with maybe some Python frameworks and PhP frameworks and stuff. So these became like building blocks.

Paul: Right. Yeah, yeah, components you can pull off the shelf.

Greg: Components – pull off the shelf, get something done quickly and effectively. Wasn’t just time is the essence but also something that actually worked.

Paul: So what time period was this?

Greg: 2006, 2007. I built this little teeny, Ruby on Rails web app. I was like an early version of an online Note Taker and just wanted to see how… And then ran it on Amazon, ran it on EC2, stored the data on S3, and it worked. I mean, it proved that something you could actually do this on AWS back in the 2007 timeframe.

Sonian: A Cloud-based Software

Paul: So then what, what happened? You decided to start another company? You’d gotten rested, fit, ready, and rested?

Greg: So, end of 2007, end of 2006, early 2007, started to network. I’ve always been interested in email and messaging and the problems around that. So, not so much build an email system or messaging system but help solve problems around those environments. And problems were morphing from your antispam and antivirus were the things people worried about more to compliance, retention, data preservation, searching on the data – that kind of stuff. So I thought that’s a domain area I know. I have lots of contacts, had a certain momentum in that area prior to the IntelliReach acquisition. So maybe I could take that knowledge base with this game-changer cloud and this framework called Ruby on Rails, mash them together and do something. And that’s sort of how we started Sonian.

Paul: I see. Okay. What was the initial goal of Sonian? Did you have a vision for it?

Greg: In a sense, yeah. It was a cloud-based, Software as a Service that would help businesses retain, search, and analyze their employee-generated content, which back then was email.

Paul: Did you stay true to that?

Greg: Yes. Yeah.

Paul: So, no pivots? Were there any major pivots in there?

Going to Market With Sonian

Greg: The pivots, we certainly had pivots. The pivots were how we went to market. So we started with, it’s going to be a direct sale. We’ll sale it directly. And we might have been a little bit ahead of where the customers were back in that time period. I think it was just at the tipping point where SaaS was taking off and going mainstream. You had Salesforce had been around for a while proving it out. And they were promoting the idea of no software and other SaaS systems were getting popular and accepted. There weren’t any SaaS apps built on the cloud back then. It was still SaaS self-hosted or in a colo or something.

And so that was a little bit against the current, so to speak, of trying to do something on the cloud. Within a couple of years, it all switched entirely. It was, if you weren’t using cloud, people look at you funny. But we were out there promoting or raising some additional funding, we had to sell the cloud as much as we had to sell the business problem we were trying to solve. So that was a little more headway than I expected or anticipated. But it all worked out.

So the pivot we made was, instead of selling directly to businesses, a service that they would add on to their email environment, we found that companies that were providing hosted email – either hosted exchange or hosted something else – they had a gap in their portfolio that we could fill for them. So we focused on white labeling and OEM and APIs to offer to those other providers that then would sell to the end user, to the end customer.

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Growing Up in Technology: Entrepreneur Greg Arnette

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