This Small-Town Tech Entrepreneur Sold His Billion Dollar Unicorn By Age 32: Here’s How He Did It

If you are an entrepreneur, business owner, or thinking of starting your own business, this article is for you.

On Thursday, 10/26/17, Datto, Inc. announced its plans to sell to Vista Equity Partners and merge with Autotask, a related Information Technology company.  This acquisition deal, which is surely valued at over $1 billion is big news for M&A, venture capital, the technology services industry, and entrepreneurs around the world.

I worked at Datto’s Norwalk, CT headquarters for three years as a sales rep. And now I am a Datto customer and advocate to my clients. You can read Austin’s interviews all around the internet, but here’s what I learned from having the privilege of working for Datto.

Datto History

Austin McChord started Datto in 2007 in his father’s office basement using his curiosity, ability to build things, and a few personal credit cards to build his first data backup product.

TL:DR Version: Austin McChord the Founder:

  • Started in a basement at age 22

  • Assembled first computer products with glue + legos

  • Struggled to find revenue for over two years

  • Had to fire (then rehire) friends

  • Ran up credit card debt for parts and marketing

  • Made sales to scrape by

  • Faced product returns

  • Almost shut down

  • Didn’t pay himself

  • Got sued multiple times

After two years of working to find meaningful sales (and temporarily laying off a few of his friends) Austin had his first break weeks before closing up shop when a tech blogger embraced Austin’s dozens of emails and phone calls and reviewed the Datto product for his readers. It worked, and Austin sold enough to stay in business and turn a profit.

Through many iterations of the Datto product line, Datto’s backup and disaster recovery products are still flying off its Monroe, CT warehouse shelves to small businesses around the world, now being distributed and served by almost one dozen offices and data centers around the world.

Despite being a 20-something with a nearly 6-figure credit card balance and no “real-world” technology or business experience, how did Austin McChord defy the odds and go from a “C” college student to turning down a $100 million acquisition offer to selling his company for over $1 billion by age 32?

An Insider’s Perspective

After working at Datto for nearly three years (before going full-time on Pinewood), I observed live, in person, several qualities in Datto’s CEO that resembled those found in entrepreneurs most of us can only read about in blogs and magazines.

1.He focused: Austin McChord started Datto to avoid getting a job. He built his first product by piecing together computer parts with hot glue and lego blocks. How many friends of yours would spend their 20’s sitting in a basement building computers and racking up credit card debt not on beers and vacations but on computer parts and server space? Tip: Find a market problem that you can solve and build a solution to address it quickly, no matter how ugly or unpolished it may seem at first. Be prepared to be “that friend” who doesn’t go out every weekend so you can work on your business.

2. He’s stubborn: Would you keep going on your business idea even if it was costing you thousands in interest payments and causing you tons of stress? Would you make 1,000 cold calls and pretend you had 5 employees even if it were just you in a basement doing it all? Austin did, and he sold products to big companies doing it. He also didn’t take venture capital investors in the early days and even turned down a $100 million buyout before age 30 because he had bigger plans. Tip: Once you commit to your business and have people ready to buy your products, do whatever you can to fund it yourself. Get a night job, sell stuff on eBay, get a credit card, get yourself some sales and make your product better each week. Go as long as you can without investor money and you can control your destiny. Datto was generating tens of millions in revenue before taking professional investment.

3. He listens: Austin McChord listens to his customers and trusts his employees. He might even up-vote this article (Austin?). When the early products had flaws and Datto’s customers called in demanding refunds and replacements, he did it. When employees asked for better benefits and perks (like better health insurance or even a ball pit), Austin made it happen. He still attends trade shows to sit in Datto’s booth to interact with customers to stay in touch with the market. Tip: Your customers and staff will tell you how to keep them motivated and buying into your vision. Take the time to listen and talk with them daily. And you’re never too busy to attend a trade show or build a ball pit in your office.

4. He’s honest: Datto has an “anonymous question” forum where Austin answers questions from employees and emails them to the entire company. He leaves his keys to his Tesla on his desk for staff to take it for a spin. He personally emails his 10,000 partners when Datto releases a bad update or buggy product. He admits that he almost failed at formal education and just wanted to build something that would pay him a $100,000 salary someday. Tip: Ask for feedback. Tell your customers when you screw up and they will respect you for it and give you time to fix it before going to your competitors. Be transparent with your staff and they are more likely to embrace change and big decisions when they may not make sense at first.

5. He motivates: The motto at Datto was it’s better to ask for forgiveness than ask for permission, which gives Datto employees power to do better work without bureaucracy. Datto’s monthly town hall meetings were always packed with transparent insights on the company’s goals, product releases, and private news that ALWAYS stayed private. Austin McChord even buys lunch for every office each Friday and sits with the staff to talk. Tip:Your staff and customers are your business. Once your business is running, focus on being a leader, a coach, a visionary, and trust your staff to do their jobs.


Datto’s success story can teach entrepreneurs a few good lessons. As Datto continues to grow with Vista Equity Partners and Autotask with Austin at the helm there is no doubt that the combined companies will continue to be a powerhouse in the Information Technology world.

And the lesson for entrepreneurs. Clearly, you don’t have to be an industry veteran, a PHD or MBA, or have worked…anywhere before, to start a company and earn a living for yourself or in Austin’s case, build an asset worth over $1 billion.

So – What’s your excuse?