Tableau Raises $10M in Second Venture Round, Wants To Be the “Adobe of Data”

Apparently it’s a good time to be in the business of data visualization. Wade wrote in July about Visual I|O, a Newton, MA-based business-analytics startup, and Hans Rosling’s splashy Trendalyzer software, which was acquired by Google last year. Not to be outdone, Seattle-based Tableau Software is announcing today it has closed a Series B round of venture financing worth $10 million. The sole investor in the deal is New Enterprise Associates, a leading venture firm based in Menlo Park, CA. Back in 2004, Tableau raised a $5 million first round, also from NEA.

I had a chance to talk with Christian Chabot, Tableau’s CEO and co-founder, and Elissa Fink, vice president of marketing, about the deal, the company, and its plans. For starters, Chabot says that what differentiates Tableau from other data-visualization companies is that, quite simply, it has a viable product that’s easy to download and use. “There’s a lot of excitement right now,” says Chabot. “Business is literally exploding in every area in terms of customer growth.”

Tableau was spun out of Stanford University in 2003, and was funded by the founders for the first year and a half. Its technology, which helps people graphically display and understand information in databases and spreadsheets, originally came out of a Defense Advanced Research Projects Agency-funded effort at Stanford. The project was led by Chris Stolte and graphics researcher Pat Hanrahan, best known for his work on Toy Story with Pixar. Stolte and Hanrahan teamed up with Chabot, who had done his undergrad and M.B.A. studies at Stanford, to found Tableau. (Stanford has an equity stake in the company.)

Chabot explains the significance of his visualization software: “Google has done a fantastic job to allow a human being to sit down with the Web and ask it questions. But the $64 million question is, who’s doing that for data? Databases are baffling…There’s this giant unsolved, planetary-scope problem—how do human beings sit down and have an easy interface to understand data, so they can answer questions?”

seattle_911dataSay you want to know where “911” emergency calls were made in the Seattle area and what they were about, or the amounts of U.S. presidential campaign donations in Manhattan by ZIP code (see screenshot left, and next page). Tableau’s software lets you compile stats from different spreadsheets and databases and quickly graph various slices of the data. The same goes for organizing and displaying things like auto sales trends, population maps, per-capita energy use, and hurricane tracking.

Tableau’s key competitive advantage, according to Chabot, is that its software can be downloaded in two minutes and used without any special training. “The big problems are actually about the user interface,” he says. “It’s easy to install and get started, and easy to get a result from it…What takes unbelievable effort and engineering is to take a complicated problem and make it simple.”

So, coming out of Stanford, how did Tableau end up in Seattle? It was simply a lifestyle decision by its founders—Chabot and Stolte had been in the San Francisco Bay Area for years, and both wanted to live in Seattle. (I can relate to making a move like that.) So in 2004, Tableau moved from Mountain View, CA, to the Fremont neighborhood of Seattle. “It’s a great city,” says Chabot. “It’s clearly no Silicon Valley in terms of sheer volume of technology companies, butit’s respectable.” Before Tableau, Chabot was the co-founder (also with Stolte) of BeeLine Systems, a route-mapping software firm that was bought by Vicinity in 2000. Partly as a result of that exit, he spent some time as an associate partner at Mobius Venture Capital. I asked what lessons he learned from his time in VC. “When you work in venture capital for a couple of years, you really get to see the revolving door of American entrepreneurs trying to pitch the next great idea,” says Chabot. “If there’s one theme I observed, it’s that they are way too focused on raising venture capital. Here [at Tableau], we’re focused on customers first and venture capital second.”

Chabot seems satisfied with how Tableau has managed its funds to date. The company was profitable every quarter of last year. “Like VMware and Google, which were similarly capital-efficient, we had the benefit of starting a business of commercializing something with a multi-year research effort behind it…We truly do believe that running a fiscally responsible business, and not spending too much too fast, is the right way to build a growth venture. We don’t have the philosophy that raising money is a big business milestone.”

Nevertheless, the latest round of funding from NEA will allow Tableau to cover larger sales territories and expand its product lines. The startup has 75 employees now, and plans to double its size over the next year. Most of that expansion will be in the U.S. sales force, Chabot says, but it is also building its international sales. “In the greater Seattle area, we’re probably one of the most aggressively recruiting technology companies,” he says. “There aren’t a lot of high-growth technology companies in Seattle with truly interesting technology, extremely large available markets, and management teams dedicated to building a public company.”

Obama_McCain 2008 presidential campaign donations in ManhattanAs for the competition in data-visualization software, Chabot says, “Where are their products? Tableau’s the one company that actually has a product, you can download it in 90 seconds and apply it to your own data. We’re the Adobe of data visualization. We make the product to allow people to go do something amazing.” Further on the Adobe comparison, Chabot notes that Charles Geschke, the chairman and co-founder of adobe joined Tableau’s board of directors last year. “We sell software to businesses and to people,” Chabot continues. “It’s like Adobe’s business model. The deeper question is how it all works. We do full-function, free trials for everyone. So many products out there that historically help people understand data and create reports, they take literally weeks to get up and running, then weeks to deploy, then to do design configuration, then you need to hire a specialist.”

Who exactly are Tableau’s customers? Chabot says the sales strategy was not to pursue niche markets. “Every single week, we sell to doctors, attorneys, nurses, scientists, sales guys, marketers, three-letter secret intelligence organizations, Microsoft, Google, Yahoo…Early on I was nervous about not having a vertical-industry approach… but it worked.” Now Tableau has tens of thousands of users in more than 35 countries, he says.

Ultimately, says Chabot, Tableau’s goal is to allow customers to “create these unbelievable and beautiful representations of data at your desk in 90 seconds…and share with other people, because they’re succinct, they look good, and they’re accurate.” Tableau also wants to help people and companies serve up their data and “publish live interactive visuals to the Web,” he says. If its brand of data visualization takes off and becomes mainstream, not just business and analyst-oriented, it might just change the way we all look at the world.

Gregory T. Huang is Xconomy's Editor in Chief. E-mail him at gthuang [at] Follow @gthuang

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