With three successful exits and a career spanning the core of Silicon Valley’s technological evolution, Ameesh Divatia offers a rare and valuable perspective on building transformative companies. From his early days in networking silicon and navigating the dot-com boom at Cisco to founding Baffle, a pioneering data protection company, Ameesh has consistently focused on creating new market categories. In this conversation, he shares the critical lessons learned from his entrepreneurial journey, including the importance of a customer-centric view, building strategic relationships with potential acquirers, and adapting to industry-wide shifts. Ameesh provides deep insights into the evolving landscape of data security, the challenges and opportunities presented by GenAI, and the timeless principles of finding the right idea and the right team to bring it to life. This discussion is a masterclass for any founder or tech leader looking to understand the mechanics of long-term success in a fast-changing world.
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Nataraj: We like to feature founders solving interesting problems, and you’re tackling data protection. Before getting into what Baffle does, can you give a little introduction to yourself and your journey so far?
Ameesh Divatia: Absolutely. I have a traditional engineering background. I grew up in India, got my bachelor’s degree there, and came here for graduate school. After grad school, I got into the computer networking industry, which was a very hot space at the time. I was fascinated with how computers could be connected and evolve into a larger IT paradigm. My first job was as an application engineer supporting networking silicon, but I quickly moved into an architectural role because I was always interested in the big picture and understanding how the customer was using the product. That has stayed with me forever. I moved into a system architect role and eventually went to work for 3Com, one of the big three along with Cisco. After about three years there, I decided I wanted to do something on my own. I quit my job, came up with an interesting angle on using data networking concepts for optical networking, and that was my first startup in the late 90s. My second startup was in storage networking, the third was a turnaround in silicon photonics, and now Baffle is in data protection. My journey has taken me through very different spaces because I like to learn new things and go after complex technical challenges. I’ve also been extraordinarily lucky; all three of my previous startups were acquired. In every case, we built a completely new market for the acquirer or the space in general.
Nataraj: Looking at your career, you were at Cisco during one of its most interesting times, the dot-com bubble. At one point, wasn’t Cisco the highest-valued company?
Ameesh Divatia: It absolutely was. It was sort of like the NVIDIA of the dot-com bubble. This whole NVIDIA story is something we have lived through. I don’t want to say it doesn’t end well, but it doesn’t stay like this forever. But it was euphoria. You would get into the office and see the stock up six bucks, and we literally thought we could take over the world. We were newly acquired into Cisco, and two things about Cisco were amazing. First, they always reinvented themselves. John Chambers had an edict that companies have to reinvent themselves every four years. We were acquired and built a completely new business on the optical networking side. Second, when you get acquired at Cisco, you are treated very well. I remember we had a record of 33 EBCs in a quarter. It was insane; every day, the who’s who of the networking and telecom world—AT&T, Verizon, Deutsche Telekom, France Telecom—would be there, and we would be presenting to them. It was a magical time.
Nataraj: Any advice for whoever is inside NVIDIA that you did or didn’t do when you were at Cisco?
Ameesh Divatia: Be humble, that’s it. NVIDIA is a different story; it’s an overnight success that took 30 years. They completely deserve what they have, but it will be disrupted. Every company has to fight to be the incumbent and drive the industry. Some are more successful than others, but nothing lasts forever.
Nataraj: Your company before Baffle was also acquired by Cisco.
Ameesh Divatia: That’s right. One thing I’ve done a lot is get involved with prospective acquirers very early. I always tell entrepreneurs not to rely on someone else to find you the exit. You have to build relationships over time. You have to be open about sharing your value proposition, but not your crown jewels. With Lightwire, it was a very capital-intensive project in silicon photonics. You need a big brother. We went out and shortlisted companies, saying, “Look, we have this amazing technology, but we need somebody to productize it.” We got a few interested, and eventually, Cisco not only got interested but invested $20 million in a $40 million round and started working with us. They needed to pack a terabit of throughput in a router blade, which wasn’t possible with existing technologies. They gave us a spec, and our team did it in less than two years. At that point, Cisco couldn’t let that technology be out there because it was critical for their success, so they decided to buy it. It was the first time they had ever bought a component company.
Nataraj: Is this technology actively used today?
Ameesh Divatia: Absolutely, it’s a billion-dollar business line right now for just this product, and they’ve expanded beyond that.
Nataraj: And you served as a partner at an investment fund, Carta. What was that experience like?
Ameesh Divatia: After that exit, I was done with operating roles and wanted a break. I thought I could take my expertise to help others at a very early stage. My CFO, one of my mentors, and I started Carta as a seed-stage fund to invest in companies. We invested in eight different companies, and six of them have been acquired by now. It was an interesting experience to be on the other side, but I quickly got bored. It’s not like running the place; you’re watching the entrepreneur run it. Then a great idea came along, which is how Baffle really started, and I jumped back in.
Nataraj: You mentioned you’ve always created new categories. How was Baffle a new category at that point?
Ameesh Divatia: We had the vision to create a new category. If you look at security, it started with protecting the pipe—the network—which led to the device wave with firewalls. Today, we are in the identity boom because we don’t own the infrastructure anymore; the data center is in the cloud. We think this is setting it up nicely for the next big thing, which is actually protecting the data itself. Identity can only go so far. If you protect the data at the record level with encryption, there’s no way to look at the data unless you have access to the keys. You’re making the hacker’s job much harder. Security has always been a race. We feel data is the next big frontier. If you protect data at the record level, you don’t care if a hack happens, because whatever is stolen is ciphertext. That’s the category we are creating: data-centric protection. The industry is starting to gravitate towards that, especially with the GenAI explosion, because you have to share your data to get good outcomes. The fundamental problem we solve is that once data moves to the cloud, you don’t want the cloud vendor to see it.
Nataraj: At what abstraction level does Baffle come into the picture, and who’s your typical customer?
Ameesh Divatia: We operate at the application tier. It’s a pure application layer solution with no dependence on any processor, operating system, or programming language. We intercept the packet that goes between the application and the database as a network-level proxy. A typical customer is the one responsible for infrastructure in the cloud. But it starts with compliance regulations. We started in 2015, and GDPR came into effect in 2018. Security sets the rules. Data analysts or prompt engineers want to move data to the cloud, but security says no unless it’s compliant. That’s when the infrastructure provider, responsible for the database, has to adopt Baffle.
Nataraj: There’s criticism that regulations like GDPR benefit big companies and make it harder for startups. What are your thoughts?
Ameesh Divatia: If you ask me, regulation is not going far enough. If regulation was great and everyone was compliant, we wouldn’t have hacks. But regulation should be easy to adopt. With data-centric protection, you’re taking a proactive measure to protect your data and ensure your customers’ data won’t be stolen. That enhances your reputation and builds trust. I don’t think it’s worth fighting regulation; it’s important to embrace it. GDPR has now been taken to a new level with things like CCPA and CPRA, so it’s proliferating.
Nataraj: When GDPR first came out, did things improve, and did the tooling evolve so a small company could also comply?
Ameesh Divatia: Absolutely. One of the big things about GDPR is the right to be forgotten and the bring-your-own-key model. That’s something we have enabled for any SaaS vendor. It used to be very complicated; you had to buy an HSM, know crypto, encrypt your data, and manage keys. We’ve completely abstracted that away from the developer. You just tell us who the tenant is, associate a key with them, and our tool handles the rest. If a tenant wants to trash their data, they just take the key away, and the data becomes invisible.
Nataraj: Talk to me about your initial go-to-market strategy. How did you pitch your early customers?
Ameesh Divatia: An entrepreneurial suggestion is you don’t want a channel on day one. You want to go direct to know what the end customer is doing. The key is to find an early adopter with a pain point that only you can solve. We found a gap in the industry with Postgres databases, which are fast-growing but have no native encryption capabilities. Our first customer tried a DIY strategy and failed miserably. They found us. Digital marketing, SEO, and SEM are absolutely critical for any business these days. People don’t like to be cold-called; when they need something, they search. You have to advertise and write lots of content. We started with a direct strategy, and to scale, we’ve gravitated towards using the cloud vendors themselves as our channel. It’s counterintuitive, but they have a shared responsibility model. We help them implement it, allowing their customers to take control of their data. This helps the cloud vendor migrate more customers and make 100x what they would pay for us.
Nataraj: Security is a cat-and-mouse game. What are the current trends in the security industry?
Ameesh Divatia: The most important trend is the evolution away from just monitoring. Things like SIM logs are being reimagined with GenAI for automated monitoring and alerting. But monitoring is great for identifying problems; what about remediation? Discovery is a big space, but just classifying data doesn’t make the problem go away. Remediation is the big trend. How do you remediate data so it becomes invisible? Encryption, masking, tokenization are techniques that can be used. We allow field-based control to transform data so it’s safe in environments you don’t control.
Nataraj: You brought up GenAI. How are you thinking about it as an entrepreneur who has seen multiple technology cycles?
Ameesh Divatia: This is going to be a multi-year cycle and a massive productivity improvement. We’re seeing it in multiple places. Our engineers use co-pilots all the time, which helps remediate things like CVEs. We use it in our customer success environments as well. A new engineer can troubleshoot a problem without needing to know who the actual customer is. We tokenize the customer name, put the data in a repository, and run GenAI models on it. From a product perspective, it will completely transform data discovery, which has never been a fully solved problem. We expect to integrate it across all our functions—sales, marketing, product blogs, all of it.
Nataraj: If you were starting a new company right now, where would you look for opportunities?
Ameesh Divatia: I have lots of ideas, but implementation and commercial fit are key. I strongly feel we are in a phase where ease of use and adoption are critical. One of the biggest problems with GenAI is that it lies with authority. Figuring out ways to detect that is a massive opportunity. In general, anything in the data realm—getting the right dataset into the hands of the right people—is always going to be a lucrative area.
Nataraj: Are your customers doing data deals with other companies to build GenAI solutions?
Ameesh Divatia: Yes. Data sharing was always selective, but GenAI is changing that. You have to share your data, but it’s hard to do without compromising customer trust. That’s where data-centric security and privacy-enhancing computation will be critical. There’s still a tremendous problem in making it easy to use, and I see a lot of innovation coming where you can share data securely.
Nataraj: This is your fourth company. Do you have a checklist or mental model you follow when evaluating a new idea?
Ameesh Divatia: I wish. All four happened for very different reasons. The most important thing is you have to get excited about an idea. Second, and sometimes more important, is finding the right team to work with. It’s like a movie: you need the right plot and the right team of actors. You want people who are subject matter experts in their areas. After that, there’s a whole slew of commercial things: find the right market and make sure it’s a critical solution, not just a nice-to-have. But those first two are the most important to start.
Nataraj: What do you consume for information? Any books or podcasts?
Ameesh Divatia: LinkedIn is a big source of my information. I also like reading business books, though I often get the gist through something like Blinkist. I like to read about entrepreneurs and innovators, so I’m a big fan of Walter Isaacson. He writes really well when it comes to capturing a person’s history.
Nataraj: Who are the entrepreneurs you most admire?
Ameesh Divatia: I’ll start with the founding fathers of this country. I think they were the ultimate entrepreneurs. They completely wrote the model from scratch, which gives me the most confidence in America’s future. Nearer term, of course, Steve Jobs was an amazing entrepreneur, as is Elon Musk.
Nataraj: Who are your mentors?
Ameesh Divatia: I’ve had a lot of them. It starts with my family—a supportive spouse who gives the right feedback. My father was a big influence. And I’ve had many other mentors in Silicon Valley who helped me along the way and continue to help me today.
Nataraj: What do you know about being a founder now that you wish you knew when you were starting your first company?
Ameesh Divatia: This is a tough one. As an engineer-founder, you tend to fall back on the idea that the technology will sell itself. That is seldom the case. You have to constantly adapt the story based on what the customer perceives. The technology is a cornerstone, but you have to constantly make sure the commercial value is there. If I knew that, I would have looked at the business side of it way earlier in a lot of cases.
Nataraj: Ameesh, thanks for coming on the show. This has been a very fun and insightful conversation.
Ameesh Divatia’s journey offers a masterclass in navigating Silicon Valley’s dynamic landscape. His insights on creating new markets, adapting to technological shifts like GenAI, and the foundational importance of data-centric security provide a valuable roadmap for entrepreneurs and innovators.
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