Chapter 1: What led to Oxide's $200M Series C funding announcement?
All right. I can hear on my headphones.
Oh yeah. Adam, can we hear you? Can you hear us?
I can't, I can't tell you if you can hear me, but I can hear you. Wonderful.
Can you hear us?
Yes. Yes, I can. Yes. I can hear you.
Can you hear us with the, with, with the correct quality of audio? Yeah.
I think so. You sound great. You sound like a millennial podcaster.
You're not hearing a difference now. It sounds good still. It sounds great. I think that they may have very badly broken the Discord app on Pixel. So my green bubble was moving, Adam.
I believe you. Everyone in chat is saying that the iPhone audio sounds significantly better.
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Chapter 2: How did the team handle the transition from Series B to Series C?
I saw that form D come out and I sort of expected the horde to like show up at our gates and they just didn't.
They didn't. And actually didn't get the sales hordes also showing up.
Yeah, exactly. Those folks are usually much more on top of it. Like, sure, the press or whatever, but they got their hands full. But usually it's like folks wanting, the oscilloscope folks showing up.
The oscilloscope folks, like the yacht salesmen and their kind of virtual equivalents. Because I don't think they understand that like, no, no, I don't have that personally. That's not what happened here, sorry.
Well, yeah, I mean, there was also like all the wealth management folks come out of the grid.
It's like, hey, good news, still zero. Right, exactly. But when the reporter was going to write on it, like, okay, we need to actually, well, it'll be fine. We'll just get our blog entry out there. The reporter was very accommodating of moving their schedule back a day or two so we could actually get our blog entry out there.
So that's kind of the, in terms of like why we announced this thing now, that was kind of it. We didn't really intend to make a big funding push. And when we, the blog entry was out there. I mean, and I don't know what we, you kind of push it out there and you're like, well, I mean, I will see if this is a top hacker news story or not, but it did end up with the top. Oh, come on. Come on.
No, I would be... There is like this kind of protracted period where it's kind of hanging out there for like 15 or 20 minutes and you can kind of see it having a limited number of upvotes. Maybe the world is just kind of sick of it. I can't really blame them at some level. It's like, these guys again. Did they just do this? Um, but so anyway, that's it.
But I think we want to backtrack a little bit and maybe Adam, we can, um, explain why we raised the C so quickly after the B because I think, I, I, I think it's fair to say, Steve, that everybody, including employees was surprised by this. Um, I mean, Adam, I think it's fair to say that employees did not see this coming.
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Chapter 3: What challenges did Oxide face while raising capital?
We had a deal that was on the goal line where the person was going to get on the call with us to explain that we'd won the deal. It was at Oxide. And they're like, I was going to get on the call to tell you that you'd won the deal. But now I have to tell you that my entire group has been let go. This morning. This morning. And we've like, like we've this organizational chaos here.
And like, this is my last day. That's right. Instead of cloud modernization, it is a people cutback is the new strategy. Yeah. It's a new shift.
Did they cut out for you guys? So just me. Okay. Lost them. Great. Perfect.
Okay, how about now?
Perfect.
All right. I received a phone call. It's good to do that, sir. Yeah, well, you know what? We are nothing if not transparent. It's a phone call. Wait a minute.
This is a phone call from USIT. Just conference them in. Oh, they're listening in here. Wait a minute. Hold on. Well, end of the podcast, everybody. It's been real.
All right.
Let's get the do not disturb. Yeah, there we go. Make sure that doesn't happen again.
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Chapter 4: What unique strategies did Oxide implement in their funding approach?
And they normally want to do quarterly turns so they can kind of cycle those things off the books. And as long as you are meeting your demand schedule and you are buying from them effectively that fully built out product in time, they will carry inventory for all those materials. So that's great. I mean, that's hugely important for cash flow conversion.
And so as you could imagine... It should be said, the cash flow conversion, this is the... I mean, as we've said, there's like for any given company in our kind of shared past, there are things we really want to emulate.
And this is something out of Dell that we... Oh, I mean, it was held up that the negative cash flow conversion, Dell and Costco are kind of the two companies that are the hallmarks of this. But... Dell would negotiate terms with their suppliers that were not net 30, but more like net 90.
And their suppliers would rent space on their factory floor so that they would not buy that hard drive until, you know, you had ordered the laptop, paid with a credit card so they already had your cash. Then someone walked down, a line worker walked down and like scanned one of the hard drives off of Western Digital's little island of real estate in Dell's manufacturing factory.
And then it would go out the door like six hours later. Amazing. So they would have, you know, a hundred days like throwing off cash in that whole purchase cycle, which is crazy. So I think we're a long ways from that because we're doing the opposite of that. Like we're wire transferring $7 million to buy parts and then consigning it at our manufacturing partner.
And so when I first went to kind of test this or operations team, you can imagine, CJ and team and Kirsten and folks, I'm like, hey, why aren't we leveraging our manufacturing partner to do procurement and be able to pick up that inventory carry? I can see this is a bad time. I'll come back later. And they were like, yeah, no, no, no, totally. Yes. Why don't we do more of that? That sounds great.
I'm like, uh-oh. And they're like, by the way, are you okay if we have some real load-bearing projects that are trying to ship in December and you end up with a four-month slip because there was a particular SKU that was incorrectly ordered by an analyst and... And I'm already just backing out of the room.
So what you trade in a little bit, and if you do it well, you can solve for both of these, but there is a certain amount of expertise that you gain when you are dealing with procurement first party for what is a broad bill of materials. over years and versus you are training up another procurement team to go do this.
And so this is that kind of like balancing where we want to go from all first party procurement and consigning, which is very capital inefficient, but it is kind of order fulfillment management. high confidence to starting to blend that out.
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Chapter 5: Why is customer trust emphasized in Oxide's business model?
I mean, no, I mean, it's like, what's luckier than that? Yeah, no, right. I mean, if you had told us when we started the company six years ago, that you are going to you will have raised your series c and have a four-person board of which you two jokers steve and me will be half of the board yeah almost 400 billion dollars in and four board members two of whom are the founder ceo and cto that's
That's unique.
It is unique. We basically jumped from a building and lived. I mean, that's, it's, when we started the company, my belief was when we actually hit the series A, you and I would no longer control the company. I mean, that's just the way it works. Like if you don't want to do that, don't go, don't have a venture funded business. Don't go into solving hard decks.
It's like at some point, like people are going to invest capital and they're going to, and I think that, you know, we had an advisor to the company because you and I have always, you know, it's always been very important to us. The advice of the company, I think, had some good words.
It's like, just so you know, like there are, in most companies, the founders are not in mathematical control, but that doesn't mean you don't have a huge amount of influence over the board. And so that's kind of what we anticipated when we started the company.
And therefore, you want to make sure that you pick your investors carefully. And you want to make sure that you have got as good alignment as you can get. And so that means making sure that you're... The whole process of fundraising is like trying on working with someone and they're trying on working with the founders.
And you want to understand that this person believes in this big opportunity and the mission and that it's not always going to be easy and it's going to take a long time. Long time now.
And we got very lucky. Well, I'm just being reminded like when sometimes we would tell VCs that and they would get more interested in oxide, not less for the wrong reasons. I know, I know. Because when we tell them like, no, we're going whaling, like, I want to go whaling. It's like, no, no, no, we're going to die at sea. You don't want, no, you actually don't want to go whaling.
But we, you know, we, and, and you, these relationships end up being extremely, extremely important and being able to have hard conversations with each other and, and take in new information and kind of process that and figure out what, what that means for what's next for the company. And we, you know, I think along the way got, got very, very lucky with,
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Chapter 6: How does Oxide differentiate itself from competitors like Nutanix?
So closed and, uh,
It closed without, so we did not add any new investors, did not add any board seats, and put a whole bunch of capital into the company, which is a lot.
And it had the effect that we were hoping for, which is while we did not want to go spend a bunch of calories trying to come up with a big fundraising announcement, all of our customers, all of our prospective customers, our partners were like, wow, that's... It's great. That's big news and, you know, gives them the confidence to just lean in further. Yeah, which is great.
And also, I think, have you found, it also, I have found, I mean, this is, okay, this is, maybe I shouldn't be saying this in a rather public spot, but I just feel like for so much of the company, it's like, this might work, this might work. Okay, yes, it seems like increasingly likely this will work, obviously.
But I feel that especially with the Series C, having absolute confidence that we are absolutely gonna be here for a long time. Like the podcast has been renewed for many, many, many seasons. kind of changes like the disposition about the way we handle ourselves, the way we kind of consider decisions, the way we consider potential customer conversations.
When you talk to a potential customer who's like, look, I love you guys, but it's like, I'm not gonna be at a decision point for like 18 months. It's like that, there was a time when that would be like, no, no, caloric budget dictates that we like, we'll just come back to you later. And now that's a conversation that we can like actually, we can cultivate over time.
It just feels like, I felt that people have asked us like, is this, are you, does this stress you out? And the Series C lowers my own personal stress levels quite a bit. Is that-
How would the opposite be true? Like because it raises expectations or something? I think so. I think so, Adam. I think that's a good question.
Yeah, I think so. I think it's because it, I also think that like, and this would be reasonable. I don't think people realize, understandably, when we say we didn't need to raise, people are like, okay, that's obviously just a fib that every startup says, which is what I used to believe. I used to think that any company saying we don't need to raise, I'm like, it's always a lie.
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Chapter 7: What are the implications of Oxide's new product offerings?
Like it was like one of those road trip pees where you can't actually, pure pain, you can't even like walk to the restroom. And then I couldn't even concentrate the last 45 minutes. Exactly, it takes like eight minutes. And the, so road trip pee, I am gonna miss my flight. Remember I was going to New Zealand, it's pre COVID. We're going to New Zealand for Christmas.
And this is like not a flight you can miss. It's not like, oh, we'll just catch the next flight to New Zealand. It's like, no, this could ruin Christmas. And this guy is like, it was like a hurricane that had crossed Florida and fucking blew into the Gulf and was picking up steam again. I'm like, this thing's going to hit Texas. It's like, this is, this is, this guy. And so, yeah. Okay. Yeah.
I interrupted Jonathan Blow. I'm really sorry that I interrupted Jonathan Blow. Okay. I did. You sound sorry. Yeah, I know. Now you're getting my actual real thought. That comment may have been written several times to be as...
At least as much time on that comment as the blog post. I love it. Maybe more. Maybe significantly more. Well, I actually dubster dove a dead comment because I asked the now in-browser LLF. They said, I like how everyone has... their own explicit theories about what oxide even is, dot, dot, dot. Definitely a scam at this point.
Hundreds of millions later and not a single video of someone using the product in detail. Yet you all suck up to it because you can't handle not sharing the same opinions as the popular kids. Uh, no videos, no videos.
Seems like, you know, like, look, we're willing to wear a couple of accusations. You can accuse us of something. You get definitely, but that is a, that is a wild one. That's a tough one. Yeah. Yeah.
A lot of videos. I mean, I did. Is this a moment? Your Friday?
FAQ Friday?
FAQ Friday?
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Chapter 8: How can listeners engage with Oxide and its community?
And that was... a big reason to, to raise. I mean, I think in retrospect, it made, it makes all the sense of the world to have raised to ourselves. Whereas. Did it make sense at the time? I mean, we did this of our own free will. No, I just mean at the time we were, we were, we didn't need to. And it was, and it was, it was very much elective in some regards.
And I think, I think in retrospect, it's like, no, I mean, absolute no brainer.
And I think it is the, I probably was more fixated on just the risk elements of like the storms that, we can weather, I mean, quite literally any storm with this. Would you say that out loud? I'm cutting that from the podcast. Nope, nope, nope. I'm saying it out loud. No, I'm saying it out loud and I'm not knocking on wood. Wow, okay. Okay, don't double down. No, the gods. Jesus Christ.
You heard me, gods. Bring it.
Come on, let's go.
No, no, no, listen. Adam, Adam, you know what to do. We have gone through bank failure at this company. We have gone through, ring the chime for that one. We have gone through machines that would not come out of reset. There's another chime you can ring. Um, no basic funerals. All right. I'm knocking on wood. God's a begging.
I don't know what I'm so sorry. Thank you. Thank you. I have a shiny object to distract you with anyway. So, uh, Oh, thank you.
Excellent.
Yeah. So one person says, uh, if I recall correctly, Brian Cantrell has compared the value proposition of an oxide rack to to an IBM AS400, to which someone reasonably replies, for those of us who are unaware of the value proposition of the IBM AS400, could someone spell it out for us?
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