 Welcome back and we're here live in Silicon Valley at the Peer 2.0 conference, I'm John Furrier the founder of SiliconANGLE, I'm my co-host Jeff Frick, this is theCUBE, it's our flagship program, we go out to the events, we extract the students from the noise, our next guest is Albergia, CEO of IIX, a new startup that's really just got their first big round of funding series A from NEA, a new Enterprise Associates, congratulations, ten million dollars of fat financing as they say, really validation to the concept of your company and the whole movement around this Peer 2.0 which is really about the next generation networks and discussions around that. Before we get into the whole Peer 2.0, give us some insight about how you started at IIX, the team, the genesis, and obviously the validation, the funding, obviously the market opportunity, business opportunity, so where did it come from, how did you guys get here? We started at IIX a few years ago and in addition to building a company, we put together a great team, so we're very fortunate enough to get some folks together that really had some tenure in the space to come on board with IIX and take it forward to the milestones that it needed to achieve to complete the recent round, for example, that we just announced. So how long ago did you guys start seeing Lopin, okay, you come together a couple of years ago you mentioned, how long ago did you guys start? So IIX was first founded in 2011, pretty much been in stealth mode for some time. We initially founded the company out of Canada and then a little over a year ago moved out here to the Bay Area and at that time we started to do our next phase of hiring and really brought on board some key folks. In parallel with that, started to bring on board some very respectful customers. What was the slash point of the, you know, kind of as the plan comes together early on? Being in stealth is fun but also, you know, you're not seeing the validation but you got to look for your own internal validation with your team and the market. You guys are domain experts. What's that flash point? What happened? Was it a key hire? Was it a key dinner? Geek session? What was the one moment? Signing of a big customer contract. Now build it. Yeah. Exactly. Oops. Self-designed build, that's the ethos of startups but that's always the case, right? It's always like, you know, you're testing the market. No, that was huge for us. It was really exciting to really put pen to paper for lack of a better way to put it and not just do it once but do it a few times over and in a relatively short period of time. And I credit that to the team that we were able to put together. Really accomplish some great milestones in a short period of time to really demonstrate the opportunity we have as a company. You know, before we get out, I'm going to love to geek out on entrepreneurship because given that you're fresh financing, you still got the memories of when it was really, really tough in terms of all the hard work. I just shared an article this morning on my Silicon Valley network about from Harvard Business Review how VC funding can be bad for your startup. And really the premise of the article was not so much about VC funding, VC bashing, it's really a lot of startups take up money too soon. And I think what you guys have shown in respect to what you've done as an entrepreneur is you've done the hard stuff first. You nail down a team, you identify an opportunity, you get some customer validation, you capital efficient, you create that crossover moment. And then the VC funding is just a result of the success, not so much a PR moment in a sense. So in a way, you're kind of doing it right. Yeah. Take us through that journey. It was a hard, it was a good day. It was definitely not easy to simply say, hey, we got an idea and then go sell that idea. We were really not having a business. And you have all the time in the world in that scenario to meet with people, meet with VCs. That's not the approach that we necessarily took. We first started off by seeding the company and really took a milestone-braced approach. We self-defined milestones that we felt were important to bring in initially some angel capital. And then ultimately get the company to a point where we felt it was a more appropriate time for us to consider doing a series A. And it was an exciting process and we made it through it. And as they say, the hard work is now. But you could have taken more money. We could have. Again, so you really guys were sensitive to the fact that, hey, let's stay humble, let's stay hungry, and not get too fat. Well, we also wanted to do right by existing stockholders and bring in that right amount of capital to help us now take a step forward to the next milestone that we set for the company. Create value and I step up and increase the value and not take too much delusion, but it sounds like the VCs got their pound of flesh as I always say, which is good for their thesis. Let's translate that now to the marketplace. You get peer2.0 kind of happening. What this is, it's like a grassroots event of folks who have been in the industry, the gray hairs, if you will, to experience practitioners to the new blood coming in. So a bunch of young guns here, students, not students, but like PhD masters kind of level of people. It's attracting a talent base. So what is peer2.0? What is this community about? Why is this inaugural event so important? Well, first off, peer2.0 has been brought forward by the peer2.0 foundation. It's a new foundation that has been formed. And this being the inaugural event, the whole theme is on education, specific to things like peering and interconnection. Very fortunate that in a relatively short period of time, we got a great roster of speakers, content providers, network operators, and what have you, to really recognize the need for knowledge sharing, for that next generation to help increase that understanding. The other great thing is that, I think there was well over a third of students that registered. So not just existing folks in business, let's say, whether they're employed by a network operator or some other business, but students with really high registration folks from Berkeley and so on and so forth. So that was really awesome, because that really demonstrated the right mix that really the foundation was after in its event and ideally more events to come. It's interesting with the students and the younger folks, because we've had a few people on, and I know some of the talks earlier today were about kind of the history of the internet and IP protocols and how we got to where we are today, but the newbies, the young kids, never had to experience that. They probably don't have any appreciation for that. They really probably don't have much time for that and really just want everything to work down on the mobile phone. So I think it's a really interesting mix and probably a much heavier, sounds like student interest in this event than most of the events that we cover, but clearly their expectations from a consumer of these services point of view is critical to actually being able to deliver those things. Yeah, it's interesting. I mean, there's a lot of talk of the cloud and in many ways we're probably living in the clouds, right? But Jay Allison today, for example, did a nice trip through memory lane on really how there's a lot of physical aspects to how this works and that really bring us to have a cloud or clouds. And so that really opens your eyes. It puts things in perspective when you see how interconnection happened and how it's happening today. And I think a lot of up-and-comers, let's say, haven't had that perspective, maybe not necessarily been given that experience or knowledge while going through, say, college, for example. And how receptive are they or do they really care? I just wanted to act like Facebook or Amazon or my Google apps. Let's make it happen. Well, I think, I mean, for those that attended here, I mean, definitely a number of folks that, again, not necessarily exclusively the younger generation, but there was definitely some conversations that I had with some younger folks and that were really appreciative of some of the talks, for example, that took place yesterday afternoon. Even myself, I just found it really cool to hear perspective from guys from Pandora, LinkedIn, GoDaddy, among others, I mean, just information, for example, that I myself even hadn't been privileged to hear before. So I could just imagine how some of the younger folks were finding it just as interesting. So let's talk about the dynamic between freedom, the democratization of networks, meeting the business reality. I mean, for profit, and I'll see, you guys are not raising $10 million to be in the philanthropy business, there's NEA, they're looking for exits, right? So there's a pressure, but it's also a market growth opportunity. So you're also balancing this new model of, hey, open source, cloud, building on stuff that's good, and that neutrality hanging over everyone's head, right? How do you build better networks, more choice, more freedom at the same time, make money? So how do you look at that as an entrepreneur? You got to balance that. Well, one of the interesting things is that if we could look back at the 90s, it was a much smaller market, a lot less market participants. So one thing that's absolutely clear is this thing called the internet has gone extremely huge, and in many respects, it's only the beginning. Movement to the cloud now by the enterprise, the so-called internet of things era that we're heading towards. So from a business opportunity perspective, I think there's no shortage. Topics like neutrality, I mean, been around for a while, I don't think they're necessarily gonna go away anytime soon. Particularly the US economy has survived many things, and I think we'll work through it. Markets forces will work through whatever dynamics may shift, but nonetheless, the growth ahead of us is so huge, bandwidth increases and so forth. I mean, it is not something from our perspective as a company, we're necessarily concerned about. So you see pretty good prospects out there, when you do your performance. Your target audience is gonna be enterprises, are they gonna be service providers? Yeah, so among others, yes, definitely it includes the enterprise. I think now topics of interconnection, for example, will more and more continue to include the enterprise where what's called generating one internet, it was less enterprise. More like ISPs and content providers. So definitely we have a big focus on the enterprise, I'm really, really excited about that. It's interesting, everyone talks about the world is flat, flattening of networks. However you want to look at is always this abstraction layer that creates, extracts away complexity and you're seeing this fabric of dynamic policy-based, QOS, SLA-driven, workload-specific, all these buzzwords are pushing down to the network layer where they've got to be adaptive. Adaptive networking is just being available to be programmed. DevOps is really the shining trend that we see. That's really the poster child for the future. The DevOps revolution's been saying, hey I'm a developer, I'm not a network guy, but I want to program the network as infrastructure as code. Explain that trend to the folks out there who aren't up on the speeds of DevOps what does that mean for the networks? What needs to get done and where is the sea change happening? Well I think first and foremost we're definitely, I think in many, many early stage companies call them software plays, content plays that would have you. I think the focus on network was always secondary. It was more on their applications and software that they were creating. It's going to become more and more important, I think in the lock step where network will equally be important and as a result of that put more pressures on the network and virtualization of network, things of that sort. To be able to allow the turn up of even internal services within an organization to really now move at the speed of business and when you start to talk like that or think like that you now need simpler solutions and so this is where software and network, there's that convergence that's absolutely needed to really introduce that simplicity for organizations such as the enterprise. For the people that weren't here, I want to shift gears a little bit and talk about the talk that you just had here at the event. I guess first of all, will the talks, do you know if they're going to make the stuff available? We make, CUBE interviews are always available but do you know if people will be able to come back after the faculty to the presentation? I believe so. I'll put you on this spot. I'm actually not totally sure. So send in a request to the peer.o foundation telling me you'd like to start. But let's talk about your talk. We talk a lot about Moore's Law and Moore's Law really being applied now kind of across the stack and we're getting this kind of perfect storm of all these great things really gearing up in terms of capacity and ability to deliver a vast amount of resources out our hand. You talked a little bit about Metcalfe's Law and networking. I wonder if you could kind of expand on that a little bit and really what was the focus of your presentation? Well, I mean we've obviously heard the term network effect and Metcalfe's Law basically surmises it into a formula and that network effect, for example social media be it the Facebooks, LinkedIn's of the world they're always measured on the size of their ecosystem and ultimately the market attributes a value to that. Similarly, networks obviously, I guess it makes sense that network effect in essence attribute a value to a network and ultimately the talk wasn't necessarily specific to any one organization but to provide a different perspective on that network effect is not necessarily a generic, it can't necessarily be thought of the same in all types of networks, types of network services and so forth. So it was really meant to demonstrate that if you move a couple things around how Metcalfe's Law can ultimately translate differently, produce a different value that's exponentially different. It was really the thrust of the talk I gave was to just- What are some of those levers that really amplify the effect? Well, interconnection's evolving. We have things like cloud exchange now and in the early days there was internet exchanges and they still very much exist still today as well. In many cases they were thought of to even still to this day in a localized basis and there's various local exchanges be it internet, cloud or what have you that exist and all things being equal the purpose of it was to just introduce that dynamic. Again, putting technological analysis aside and opinions on that for a moment. How 20 here and 20 there of let's say, of unique networks let's say, when you apply Metcalfe's Law in looking at them as separate and distinct versus as if they were unified the network value is not necessarily one plus one equals two. It's exponentially different when you apply that formula and so it's value not necessarily from a finance perspective but for your customers, the potential users of a particular service or application and so that was really the thrust of it to really give people perspective that don't necessarily take things at face value. How you do things can really impact your business, your service or what have you to create a much more dynamic value ultimately for whoever you're targeting. And it would seem then that the fact that we have kind of an API economy, the fact that a large number of both consumer as well as enterprise applications are moving into a cloud infrastructure so they're no longer in that isolated sub network if you will, that clearly there's business value being released all across the network both for the applications as well as the network providers as well as the consumers of those services. Yeah, I would agree, I agree with that. So talk about what's next for you guys, obviously you got some build out to do. You guys are big players in the peer 2.0 and you know it's not your conference, you're part of the sponsors here, you're part of the community, which is great because it's great for recruiting, great for evangelism, but it's also good for the openness of the web and the internet. So great there, but on the business front, what is your key build out mode right now? Hiring, customer acquisition, what's the pig to do with? Yes, yes, yes, yes. Yeah, no, I mean that actually in all seriousness, we're definitely focused equally on expansion, business development activities and expansion both from a geographical perspective in terms of rolling out our solution to more markets now, as well as expanding our organizational headcount, bringing on board more individuals onto our team. So it's, we're firing on all cylinders to take our company to the next phase. It's been great to get to know you at a great time last night, having some beers at the event party last night, obviously no build for years, great team, you have congratulations on your success, Al, 10 million dollars, NEA funding, fresh financing in the bank, watch for IIX in the marketplace, again, a lot of stuff happening, great market opportunity, congratulations. This is theCUBE, I'm attracting the signal from the noise here live in Silicon Valley in Palo Alto at Peer 2.0. I'm John Furrier with Jeff Frick, we'll be right back after this short break. Thank you.