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Seven years ago, UCLA alumni Mohit Lad and Ricardo Oliveira moved to the Bay Area to start a company built on cast-off computers picked up from a recycled computer store. Now their startup has a valuation of over $273 million, multiple investors including Salesforce, Google Ventures, and Sequoia Capital, as well as hundreds of employees across three different offices in San Francisco, Austin, and London.

The story behind ThousandEyes is far from the stereotypical background of a regular Silicon Valley startup. But, much like any startup, it all started with an idea.

Researchers at UCLA

Mohit Lad, CEO & Co-Founder of ThousandEyes

Mohit Lad and Ricardo Oliveira were both pursuing their Ph.D.s in computer science at UCLA during the early 2000s, where they both worked at the Internet Research Lab and were advised by professor Lixia Zhang. The bulk of their research focused on “understanding how things break the internet, and how that impacts the rest of the internet”. Throughout their time at UCLA, they held multiple internships – Oliveira at AT&T and Juniper, Lad at Nokia – and during their time working in industry, they realized there was something missing from these networking environments.

“One of the big problems right now is that the internet is a big black box for almost everybody – they’re relying on something they don’t understand to run their businesses. What we wanted to do is demystify this, and give companies a view that makes this really complex environment look like their own network,” Lad said.

They realized they could fill this gap by building a brand new kind of network monitoring software – one that could watch the whole internet, and not just a single company’s internal network – and soon became committed to building their own product and their own company, from scratch.

While Oliveira had been entertaining the idea of starting a company for a while, Lad was initially set on pursuing a career in research and academia. He was drawn to academia since he knew he’d be able to work on difficult problems that he was actually interested in, rather than working on a corporate agenda. He also found appeal in the mentorship aspect of academia – as a professor, he’d be able to shape the career paths of his future students, and inspire them to pursue similar paths of research or academia. However, after convincing arguments from Oliveira, Lad came to the realization that both of his objectives could be achieved on an even larger scale by doing the very thing he’d been avoiding: starting a company.

“[I realized that] by starting a company, I could work on hard problems that could actually have an impact, rather than just writing research papers, and I could build something that people would actually use. And we’d also be able to create an environment where people could work while having the experience of a lifetime – we could help shape their careers, and watch them grow along with the company,” Lad said.

While ThousandEyes didn’t become a full-time commitment for Lad and Oliveira until after they completed their Ph.D.s, the beginnings of the company started during their time at UCLA. While he was working on his Ph.D., Oliveira developed a free tool called “Cyclops”, which allowed users to be alerted of routing hijack attacks, a type of security attack in which attackers take control of groups of IP addresses in order to manipulate the routing of information. Little did he know, Cyclops would serve as a starting point for the multi-million dollar startup he would eventually go on to co-found with Lad.

“When we started the company, we joked about building something that was a thousand times better than Cyclops…[hence] the name ThousandEyes,” Oliveira said.

Ricardo Oliveira, CTO & Co-Founder of ThousandEyes

Frugal Beginnings

Despite having this revolutionary idea, Lad and Oliveira – like many startup founders – had no money to even start working on their product. In order to create software that could “watch” the whole internet, they’d need their own equipment to build their own data center. And as recently graduated Ph.D. students, they barely had enough money to make ends meet in the first place. So, they turned to an organization they were all too familiar with for funding, thanks to their research background: the National Science Foundation.

“We didn’t know at the beginning that [the NSF] had a program for startups and young companies, but the fact that we were familiar with the NSF as an organization definitely gave us the confidence to search out and apply for this means [of funding],” Lad said.

In 2010, Lad and Oliveira successfully received a grant from the NSF which would eventually pay out to roughly $1 million. Their method of funding was so unorthodox that Lad eventually went on to write a blog post about it. But the grant was, at the time, a double edged sword. While it allowed them to circumvent the traditional method of seeding startups by selling off chunks of equity to venture capitalists or angel investors, the $1 million grant was paid out in small amounts every 6 months – an eternity in startup time. The initial payment was just enough to allow them to move to the Bay Area – at the time, a more startup friendly and network-oriented environment than Los Angeles – and work full-time at ThousandEyes, while living frugally in order to survive and make ends meet.

Weird Stuff recycle computer store, which Lad and Oliveira frequented during the early days of ThousandEyes.

The Weird Stuff recycle computer store, which Lad and Oliveira frequented during the early days of ThousandEyes

“Our first office was a converted living room area, and our first data center was in the garage of that house. We were building servers from companies and labs that were shutting down,” Lad reminisced.

In retrospect, though, both Lad and Oliveira agree that the gradual payout of the grant was a blessing in disguise.

“Because we didn’t follow the route of investor funding, there was a lot of focus on building a solid product that can sell,” Lad explained. Since the payout was only granted if the company showed sufficient progress in their product, the biannual funding also helped keep the company focused and on track. “So, since the beginning, the company DNA has been about building a product that can get customers excited, while also generating a revenue stream that can continue to fuel the company’s growth.”

Acquiring Customers

With the product side solid, Lad and Oliveira’s next challenge was finding customers. This was yet another tradeoff from getting funding from the NSF – while startup accelerators and venture capitalists offer startups a diverse network that can help generate interest and awareness of the product, the NSF, as a research-based government organization, offered nothing of the sort. But finding customers wasn’t a problem for long, since the very purpose of ThousandEyes was to monitor the internet – and so, they knew which companies were struggling to stay online, and why.

So, ThousandEyes turned to Twitter to seek out frustrated companies in an effort to convert them into happy customers. They’d send these companies information on what went wrong, and tell them why users in certain regions weren’t reaching them. After the initial cold call, it didn’t take much to convert these companies into full-time customers, and by 2013, the company had a sizeable customer base, including a number of Fortune 20 companies.

Since then, ThousandEyes has come a long way, even being featured in Forbes as fourth on the list of “Hottest Startups of 2014”. Both Lad and Oliveira agreed that one of the biggest contributing factors to the company and its success was their time at UCLA as researchers, where they explored in depth networking topics that were applicable to real-world problems. Their time as Ph.D. students, they said, “vastly shaped the way we thought about the problems we worked on, and [our passion for] making a real world impact”. Lad and Oliveira are also thankful for their advisor, Lixia Zhang, for continually exposing them to the networking community on a larger scale, and for focusing on solving problems that would create a real-life impact on the community, as opposed to addressing more theoretical topics.

ThousandEyes employees monitoring the internet

A Word of Advice to UCLA Students

When asked about advice he would give to current UCLA students, Lad firmly stated that students should “give startups a chance”.

“There’s really a huge cultural gap [between LA and the Bay Area] – when [UCLA] students finish their degrees, they’re always thinking about [working for] Google, Facebook, and other big companies, instead of looking at startups,” Oliveira added. “In San Francisco, you can walk into any coffee shop, and someone will be working on or talking about their own startup.”

“Not everyone is necessarily fit to start a startup, but I think everyone should really consider being a part of smaller companies,” Lad continued. “The experience of growing a company and being a part of that journey is really almost as valuable as starting the company itself.”

Lad and Oliveira are both excited about the growing interest in startups in LA, and in the long run, they hope to see the startup culture within UCLA grow at an even more rapid pace.

To learn more about ThousandEyes and their product, visit their company website and blog. For more resources on joining a startup or funding your own, visit the UCLA VC Fund, Startup UCLA, or read UCLA ACM‘s recent blog post on jumpstarting your career at a startup.