Startups Need to Keep the Lights On

Posted by Kate Jurras on Thu, Jun 21, 2012

dave resized 600This post is part of our June series on start-ups. We reached out to some of our favorite local start-uppers to find out how they're innovative. This post is by Dave Laurello, CEO, Stratus Technologies. Dave rejoined Stratus in January 2000, coming from Lucent Technologies, where he held the position of Vice President and General Manager of the CNS business unit. At Lucent, Dave was responsible for engineering, product and business management and marketing. Prior to this role, he was Vice President of Engineering of the Carrier Signaling and Management Business Unit at Ascend Communications.

There are so many types of startups that we’ve seen launch over the past couple years. Some of these companies build and develop mobile apps like Square or RunKeeper, others have created popular social networks like Pinterest and Twitter, and then there are countless other new web-based startups that change the way people think and use the Internet.

The common thread between all of these startups is that to achieve success, they have to have the proper IT infrastructure in place to handle their traffic and growing user base. If their site/service experiences regular downtime, it will no doubt frustrate users to no end, and eventually push them away.

When Facebook was still in its early stages, Mark Zuckerberg was adamant that the company always have enough servers to keep the site up and running. In The Facebook Effect, written by David Kirkpatrick, Zuckerberg says that he had seen how Friendster was badly hurt by their continuous IT downtime, and did not want Facebook to follow the same path. While Facebook has had downtime problems on occasion, the company has never been significantly affected due to their determination - especially early on - to keep the site up and running 24/7.

While companies like Facebook are well aware of the detrimental effects of IT downtime, I’ve been very surprised by the overall lack of awareness that many companies and industries have around this crucial element. Stratus has conducted large-scale surveys in tandem with ITIC that have found most companies and organizations don't adequately calculate the cost and affects that IT downtime will have on their business. Some of the alarming findings include:

  • 29 percent of businesses don't consider customer dissatisfaction a factor contributing to their cost of IT downtime.
  • 38 percent of businesses don't consider damage to their company's reputation as a contributing factor to the financial impact of downtime.
  • 81 percent of businesses don't calculate goods and materials lost into their cost of IT downtime.
  • 45 percent of businesses don't consider lost sales revenue as a factor of their IT downtime cost.
  • 52 percent of businesses don’t know the potential financial impact of IT downtime on their company.

Today’s startups need to follow Zuckerburg’s example and place high importance on IT uptime. All companies - especially web-based startups - will put their business in significant risk if they experience any downtime, never mind continual downtime. While IT may be overlooked by some startups who want to use their budgets in other areas to attract customers, it cannot be stressed enough how IT uptime (or downtime) can significantly impact long-term success or premature failure of a fledgling enterprise.