33 Rejections Before $40M: How Pete Thompson Built LucidLink

When venture capitalists rejected his idea 33 times in a row, 57-year-old Pete Thompson had two choices: give up on his dream or double down on what he knew others couldn't see.

Thompson is the co-founder and CEO of LucidLink, a company that transforms cloud storage into unlimited high-performance drives accessible from anywhere. What started as a "bad idea" that VCs wouldn't touch has grown into a $40+ million ARR business serving over 100,000 active users across creative industries.

In this candid interview, Thompson shares the brutal reality of starting a company at 57, weathering the COVID funding crisis without laying off a single employee, and how the darkest moments often precede the biggest breakthroughs.

Pete Thompson: My name is Pete Thompson. I'm co-founder and CEO of Lucid Link. Lucid Link transforms cloud storage into an unlimited high performance drive that can be accessed from anywhere and collaborated on with your team without having to synchronize, download, or ship files around.

Lucid Link has over 100,000 active users now, and we've grown the business over the last few years from effectively zero to over 40 million in ARR. Our next stage is we're focusing on that 50 to 100 million ARR milestone.

Pete Thompson: That was one of the things I think I learned early on in my life. I was in a program to become a doctor. I was in a pre-med program. I thought that's what my path was. And it was just by chance that I had this opportunity to go to Japan, and as it turned out, it changed the trajectory of my life.

After I had spent a year of university studying in Japan and just realized that I wanted to do something in my career that involved Japanese that I had learned, so I joined Data Corps as an employee number 20. My role in Data Corps was to help them establish their business in Asia Pacific, but in doing so, I spent a lot of time traveling to these areas and speaking to people, and I had to speak to them as the representative of Data Corp as a storage expert, but there was a problem. I wasn't a storage expert at the time.

I needed to be able to gain their trust. I couldn't lie to them. I couldn't pretend that I knew things I didn't. So there were a lot of very uncomfortable moments where I was kind of right on that edge. I knew I was slightly out of my element. But I was honest about it, but at the same time, they realized, OK, he's still, you know, we can, we can trust what he's saying, and gradually over time and through a lot of uncomfortable moments, I just, that's how you learn, you know, you push yourself out of your comfort zone and you gradually, one day you wake up and you realize, you know what, I kind of am an expert now.

Pete Thompson: At some point while I was working at Datacore, I realized that my job was becoming easy for me. It became a little bit repetitive. I wasn't growing, and I didn't have that feeling of challenge anymore. So all of this told me it's just time to move on, but I wasn't sure how to move on, but it was at this time that a friend of mine had gone through the same program, the Sloan Fellowship program at Stanford.

Well, Mike and I were fishing buddies, so while you're sitting out on the ocean, I learned more about the time he spent at Stanford, and he finally said, you know, this was, you should just go there and do this program, find it, figure out something to do and start a company. And I said, huh, yeah, maybe I should. Let me try that. And so I was accepted into the program and I went into it with that. I said, OK, I've got one year here. I want to address some things that I want about myself, challenge myself in some uncomfortable situations, and either come up with an idea or meet some people who have an idea that I can join and start a company from scratch.

Pete Thompson: I was 48. I was the oldest person in the program.

Pete Thompson: It felt really uncomfortable, but also, it was amazing. I was worried that the time was gonna go too fast. I was worried that after a year, maybe I didn't know what that next thing was gonna be. I felt I have to make the best use of this time.

Pete Thompson: I think it was October or November when I was in the program. I didn't know what I was going to do, although I was certain that it would have nothing to do with storage. That was the last thing I thought I was gonna do. All of a sudden, my co-founder George called me up. We didn't work very closely at Datacore, but I knew him well because he was the first engineer that they hired, he was known to be a brilliant engineer.

He called me up and he said, Hey Pete, I don't know if you realize this, but I left shortly after you did because I had this idea in my head. I needed to get it out of my brain and into code and see if it had merit. Are you interested in seeing what I built? And I thought, Yeah, of course I am. He showed me a demo that blew my mind. After all those years in storage, I said, wait a minute, is this just a demo or is this actually happening live? Because this shouldn't be possible.

He said, look, I've got this idea. I'm looking for some partners to help find investors, to grow the business, to do all of this. And I'm at Stanford, learning how to start a business, get investors, know how to build a business, and I'm looking for an idea. This could be a perfect combination. Tell you what, let's use the rest of the time I have here at Stanford and the resources, some of the classes that are available to me to really pressure test this idea. Let's try to prove to ourselves that there's nothing here. Let's try to prove this theory that there's a company in this technology.

Pete Thompson: The problem that we're trying to solve was you've got large sets of data and a whole bunch of people that need to access it. Some of these files within this data set are super big, and that makes it even more difficult. Today you have two choices. You can move the compute and the applications to where the data is stored, or you can move the data and the files to where the compute is running, but they have to be together, and most of the technology was all based on either moving the data faster or creating replicas of those files so that they were next to the applications.

What we were doing was something completely different. We said keep the data stored where it is, keep the compute running to where it is. We will present it as if it is local, and our technology will solve the problems around performance and collaboration. If you can break that fundamental difference or fundamental dependency on an application requiring a file to be right next to it, now you can make those decisions separately. You can choose where to store stuff based on place to store it. And you can choose where to run your applications based on a separate set of criteria that unlocks all of the productivity that we've been doing, but first we had to get funding.

Pete Thompson: We knew this was gonna be a difficult and highly technical product to build, so we needed funding and we needed time. After I graduated from Stanford, we began pitching to VCs and they all told us no they all told us. It'll never work. It's a bad idea. People won't pay for it, even if you do get build it, they won't care. There were so many reasons not to invest in it, and that was hard.

Let me tell you, venture capitalists are very smart. They see a lot of great ideas, they have a lot of success, investing in world class companies. So when they tell you that your idea sucks, it's hard to say you're wrong, but you have to, you have to believe, you have to say that there's something that they don't see. There's something I know that they don't know. They're generalists, they see a lot of things. I'm a specialist, I know storage, I know this problem firsthand.

So what was the problem? Maybe I'm not pitching it correctly. Maybe I have to change my story, you know, so we kept iterating on trying to figure this out. Finally, after 33 rejections or 33 no's, we finally found an investor who said, I think there is something here, and he was willing to invest in us. That was Steve Anderson at Baseline Ventures. He was well known for picking winners, so the fact that he saw something here really motivated us as well.

Pete Thompson: So we got funded, and now we had to build the product, and it took 2 years to build this product. From 2017 to 2019, we're building the product. From 2019, we really had the product out, and we're trying to find the initial product market fit. So we were getting close to that in 2020. We had to go out and get more funding. We weren't funding because we had the metrics, we were funding because we're running out of money. Not a great position to be in.

So we knew that this was still going to be a case where we're gonna have to sell vision. We were ready to do that. We got a whole list of VC meetings set up and on a Monday morning we're driving up Sandhill Road in early 2020, and suddenly we got a phone call and they said, oh, hey, by the way, we're gonna have to cancel this meeting today. We're not allowed to take any more in-person meetings. We're going to put a pause on all new investments until we kind of see how this COVID thing is gonna shake out. It'll probably be maybe two weeks or a month, and then we'll be back to business as normal.

Well, we've got a couple hours before our meeting in the afternoon. Let's go to a coffee shop and work on our pitch deck. So we go to the coffee shop and walk in and we get another call, the next meeting. Basically the entire week of VC meetings got wiped out in one day.

Pete Thompson: No funding, capital markets have dried up, and a short runway. That was kind of a moment we went, uh oh, what have we done? I went out and I started asking all my mentors and all of the people for advice, and they said, Lay off everybody you can except just the core people, protect the IP, live to fight another day.

George and I looked at each other and said, hmm. That doesn't really align with the core values that we said we're all about. And if we don't use our core values to make the hardest decision of our life, then they're not really our values. So we said, all right. We're not gonna do that. Instead, we got the entire team together, about 25 people at the time. We're very transparent, which is one of our values. We told them exactly what was going on. We asked everybody to take deep cuts to have a belief in the company and us to figure out how we're gonna weather this storm, and we've ended up keeping everybody.

I don't think I slept. During that period, I mean, yeah, I closed my eyes at night, but, you know, it was just terrible sleep and there was a lot of pressure, and it wasn't just me anymore, it was 25 people and their families who had a belief in what we were doing, and during that time, that's when we did find our product market fit.

Pete Thompson: It was during that time we got the first call from A&D Networks, and they said, We don't know anything about your company, but somebody over at Adobe said we should call you. We just sent home 80 engineers with a laptop, a hard drive, and a VPN connection, and that's probably gonna let us get through about the next 2 weeks of production, and then we're just not sure what we're gonna do. Can you help us? And we said, yeah, that's exactly, we can absolutely help you.

So we set them up on a POC and they, the POC ended up running from directly into production, and we closed them at nearly 100K ARR contract. Now remember we're our total ARR at that time with 50 customers was around 100K, so this was huge. And it was during that time that we got the next call from Viacom CBS and then the 3rd call from Vice News, and all of them had the same story, the same problem, the same outcome, and at that point we said, all right, we are no longer a general file access platform, we are now a creative content collaboration tool, and that's when we went from 1000 in ARR to a million that first year, and then went from 1 to 5 to 15 to 30 and we're still going.

Pete Thompson: To people who haven't found their product market fit or are trying to wait for their opportunity to come, I guess I'd say believe. If you have done the work and you know your product and you know the market, you know there's something there, you have to believe in it, and you just have to have the resilience and the grit to keep bringing it every day. That's the hard thing about being an entrepreneur. You've got to dig deep when no one else believes and you have to believe. Not only do you have to believe, but you have to make sure that your team believes. That would be my advice, you just, you can't give up.

Pete Thompson: I was worried that after a year, maybe I didn't know what that next thing was gonna be. I felt I have to make the best use of this time. So, did you make the best use of that time? I think I made the best use of the time there. I mean, the fact that I was able to start Lucid Link, and it's become such an important part of my life and an important part of almost 200 people who work for the company, it was absolutely worth it. I think, I can't imagine a better outcome for me personally.

Pete Thompson: How do I think about the ability to nurture instinct to challenge yourself or just to put yourself in challenging situations? I think this is something you can nurture. People talk about growth all the time, they say, oh, this is amazing, we get this chance to grow. Growth is hard. Growth is painful. Growth kind of sucks sometimes. The result of growth is awesome. The process of growth kind of sucks, it's hard.

How you can do that, it's through habits, it's through not taking those shortcuts, it's through recognizing when you have a decision in front of you and doing something that is right, not necessarily easy. The more you do those, and those can be small things, they can be small things like waking up and being like, yeah, I don't know, I don't have to go to the gym, or go to the gym and say, you know, I'll just do 1 set instead of 3.

Every time and no matter how small or big those decisions are, that you take not the easy path, but the right path, you're going to gradually build that habit within yourself. You'll build that muscle, to be open to challenging yourself. How you do one thing is how you do everything.