We were five engineers sitting around, soldering things together. When we had the first instrument built, we looked at each other and said ‘now what? I was the least geeky of the five, so I was elected to go out and sell it. I made what probably was the first sales call of a music synthesizer manufacturer on a retail music store. If you know any of The Who tunes like ‘Baba O’Reilly’, that's all ARPsynthesizers. And then probably there is another 12 or 15 million small businesses worldwide. It's an enormous market opportunity for us, and wide open, with not a lot of competitors,” says Friend.ĭavid got his entrepreneurial start right out of college when he helped create a music synthesizer company called ARP, which provided technology to Rock bands such as Led Zeppelin, The Who, Stevie Wonder and The Beach Boys. And we have about 4,000 resellers now who have signed up to sell Carbonite to all these small businesses of which there are about 6 million just in the United States.
We have more than 50,000 small businesses now using Carbonite. Today more than 50 percent of Carbonite’s business is coming from products and services for the business customers, taking its consumer-oriented DNA of easy and inexpensive to move up market. They then began to focus on providing solutions for small and medium sized businesses as the next growth wave. The company then began examining its customer base a little more closely and discovered that almost a third of their consumer customers were actually small businesses who were buying Carbonite, because it was cheap and simple. That's how we got to $100 million in sales in just four or five years,” says Friend. Every year we doubled the ad spend which doubled the revenue. “It was a real stroke of brilliance on the part of our marketing VP. The company then went out and signed up every national talk radio show host from Howard Stern to Rachel Maddow to Glenn Beck to Rush Limbaugh to pitch for Carbonite. We found out that people who listen to talk radio, especially conservative talk radio, really trust the hosts,” says Friend. That's when the company came up with the idea of using endorsements from talk radio show hosts. Marketing would need to be the driving force to grow the company. Once the technology issues were solved, the company’s next challenge was creating a brand that people would trust with their most precious documents. And that was how we got started,” continues Friend. Jeff came up with this new architecture that makes much more efficient use of disk space and compression techniques, requiring a lower amount of compute overhead for the amount of storage. It gave us a real, sustainable cost advantage in the marketplace. But if we just back up everything and don’t miss anything, then it will be a really good service because people always forget to back certain things up, even when they're using external hard drives,” says Friend.ĭavid’s partner Jeff came up with the technology solution to store enormous amounts of data in a way that was much cheaper than what had been on the market at the time. “As Jeff put it at the time, a database can either be slow and cheap or fast and expensive. We’ll offer to backup everything, and yes, we'll lose money on the one or two percent of the customers with giant file size requirements.
Nobody knew how much storage file space they needed. In order to do that, we would have to offer unlimited backup for a flat price, because what was out in the market at that time were some early cloud backup companies and they sold their storage by the gigabyte. “We thought that if we could reduce the issue of installing and using a backup solution that only involves an e-mail address and a password, then we would really have something. Prior to Carbonite, Dave and Jeff founded Pilot Software, FaxNet Corporation and Sonexis Incorporated.
The Boston-based Carbonite now has 425 employees with revenues of $107 million last year (up 28% Y-O-Y), and is the fourth joint venture between David Friend and Jeff Flowers, both well-known Boston-based entrepreneurs.
His most successful endeavor to date, Carbonite Inc., was formed in 2005 in his dining room, and grew in less than six years to a publicly traded company. Friend has been a successful entrepreneur for more than 40 years, acting as co-founder for six technology companies in the Boston area. Thus Carbonite was born as an idea. The key to David’s success lies in his own experience as a small business owner. It dawned on David and Jeff that people are always connected to the internet-why not find a way to automatically back up files over the internet to the cloud? They thought, if they could make it simple enough and cheap enough, everyone would be able to do it.
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