Diane Greene at Startup School 2013

Greene describes VMware’s goal of making virtualization ubiquitous by 2000; the company missed that date by about six years. The founding team began with five people, kept its first office inexpensive, and made room for family life as the company grew.

The founders initially self-funded and sought technically knowledgeable angel investors, including Andy Bechtolsheim, John Hennessy, and David Cheriton. In 2000, they held their valuation steady and closed a round led by Dell after other investors tried to lower it when the dot-com bubble burst.

Greene says a large vision needs a manageable first milestone. VMware began with desktop software that let people run Windows on Linux or Linux on Windows, without relying on changes from Microsoft or Intel. The team priced it at $299 for commercial use and $99 for hobbyists, then drew attention through Demo, Slashdot, and press coverage.

VMware lacked the resources to build its own enterprise sales force, so it looked for ways hardware vendors could benefit from selling its product. An IBM technical fellow saw how the desktop product could help sell IBM servers, and a reseller program later helped VMware reach enterprise customers after IBM’s lawyers halted an initial deal over GPL software.

Greene closes by emphasizing the value of bringing a useful product to market that customers appreciate. She recalls enthusiastic customer messages and says each startup brings different challenges.