Sometimes the future is obvious. That does not mean a company moves fast enough to capture it.
Soon after we invested in MemSQL, now SingleStore, we pushed the company to move quickly from on-prem software to a cloud-native managed service. The founders agreed with the direction. The market was clearly heading toward the cloud.
But SingleStore did not make the shift as quickly as it needed to.
Some of its largest customers wanted to stay on-prem. When major customers are paying you to keep delivering what already works, it is difficult to prioritize the business they may want tomorrow over the revenue they provide today. Moving the code base to the cloud also proved to be a heavier technical lift than any of us expected.
The founders listened, tried to make the transition. But the pull of large customers and the work required to support the existing business slowed the company down.
The result was a hybrid offering with real advantages, but also real costs. SingleStore could continue serving customers that wanted to remain on-prem while building for those moving to the cloud. But it did not become a pure-play cloud managed service at the speed the market rewarded.
That delay cost the company growth and value. SingleStore has not grown as quickly or received the same valuation as pure-play cloud managed services companies.
Now the cloud business is beginning to show what was possible. Last year, SingleStore’s managed service was generating essentially no revenue. Today, it represents roughly one-third of the company’s $100 million in ARR.
That progress is meaningful. It also makes the cost of the slower transition clearer.
We were right about the direction, and the founders understood the advice. But understanding where the market is going is not enough. Companies also have to move before the opportunity is obvious to everyone else. But we underestimated how hard the turn would be.
The pull of existing revenue is real. So is the work required to rebuild a product for a new delivery model. SingleStore faced both and did not move quickly enough. The cloud business it eventually built is now becoming a meaningful part of the company, but some of the growth and value it might have captured along the way cannot be recovered.
Being right eventually is not the same as being early. In a major platform shift, timing becomes part of the strategy.
