Davis Baer

Host of Hacker Noon Founder Interviews

“Something much broader than compensation drives us.”—Emil Eifrem, Neo4j Founder — Interview

Emil first sketched the idea for the company on the back of a napkin during his flight to Mumbai in 2000. Today, the company is the world’s leading graph platform, powering mission-critical enterprise applications, including artificial intelligence, fraud detection, real-time recommendations, and master data.

What’s your background, and what are you working on?

Hello! My name is Emil Eifrem and I’m the CEO and Founder of graph database company, Neo4j. I was born and raised in Sweden but now split my time between here and the U.S., specifically California, where Neo4j’s HQ is located. Prior to founding Neo4j in 2007, I was the CTO at Windh Technolgies, a media asset management (MAM) solutions provider.
Neo4j is a category-defining graph database platform which powers applications tackling artificial intelligence, fraud detection, real-time recommendations, and master data. Collectively, the Neo4j community has been using graph technology to solve some of society’s most pressing problems: climate change, curing cancer, accelerating humanity’s journey to Mars, advancing gender equality, improving government transparency, and pushing the boundaries of human knowledge.
The beauty of graph database technology is that it can be used across several industries, markets, and verticals. The same Neo4j technology that helped discover and untangle the web of the Panama and Paradise Papers has also helped NASA modernize its famous “Lessons Learned” database and advance its missions to Mars. Our technology has been used by the German Center for Diabetes Research (DZD) to help current diabetes patients and work toward eliminating the disease. It has also been deployed to offer powerful, real-time online recommendations for Walmart.com.
To date, we have raised a total of $160 million in growth funding, completing a Series E round of $80M in November 2018 — the largest cumulative investment into a graph database company. Today, our platform is used globally by:
  • 20 of the top 25 financial services firms
  • 7 of the top 10 software firms
  • 3 of the top 5 logistics firms
  • 7 of the top 10 retailer
  • 3 of the top 5 airlines
  • 4 of the top 5 telecommunications firm
  • 3 of the top 5 hospitality companies

What motivated you to get started with your company?

Believe it or not, I got the idea for the very first graph database mid-flight on my way to Mumbai. It was the year 2000 and Johan Svensson, Peter Neubauer, and I had been building an enterprise content management system (ECM) but kept running up against the challenge of using an RDBMS for querying connected data.
That’s when an idea struck. I grabbed a napkin and quickly sketched the first property graph model. The ideas sketched on that napkin took form as Neo4j, the world’s first graph database, which also started our company. Though we were solving for our unique situation at that time, I couldn’t have possibly imagined the worldwide impact that napkin sketch would create.
When we founded Neo4j, we knew we had found a very elegant new way to solve a hard data problem, but we could have never foreseen the growth of connected data. Now it’s everywhere — we have connected devices and networks, social networks and human relationships, and big trends like IoT and AI that are proving the power of understanding relationships in data. Building a graph database (and other graph technology products) is only a part of bringing that vision into reality.
While our commercial business is solving high-value data problems for big companies, our open source community has really shown us how powerful graphs can be for non-corporate use cases. It’s for that reason precisely why we launched our Graphs4Good program in September 2018. Graphs give us a new perspective and tremendous power to transform our society for the better. Each day, I hear stories of how our customers are deploying graph technology to make positive change, and I continue to be amazed and humbled by the world-changing work of the Neo4j community.

What went into building the initial product?

We realized that we had created a powerful tool that solved real problems and connected data in a good and powerful way. We also realized that others likely had the same problems, and that the amount of connected data we had as a whole could only grow and grow. This was a powerful position for us to be in, as category creators in a growing market. At the same time though, we knew we needed a name.
My co-founders and I were versed in math and graph theory, but knew that “graph” didn’t mean the same to all. For most, when they hear graph they think X and Y axes and charts. Along came a website from Harvard though, called The Facebook, that coined itself as a “social graph” — a technical mathematical name for a consumer site. It was then that I realized I could use the term graph database and like magic, it took off.
I remember being at a party and bumped into somebody from Ericsson. He asked me what I do and I thought I’d give the new name a try, so I said I worked for a graph database company. To which he responded, “Oh I remember them from school but haven’t worked with them in a while.” Which, to my amusement, was a bold faced lie because I had only just invented the term! It became a magical property that people believed was real before it was even real, which was all the assurance and confidence we needed. We evangelized the concept and category and have been doing so ever since.

How have you attracted customers and grown your company?

I always felt in order for Neo4j to take off and make a massive impact, we needed to make a bold entrance. We chose category creation as our go to market strategy; Neo4j is a graph database and we were the first company that put those two words together. When you end up owning a category and becoming a leader in a fast-growing company, you get an incredible reward. But it’s also really difficult to pull off. Given this, we chose an open source approach to distribution to get the viral, word of mouth marketing because we knew that wasn’t going to come from funding necessarily.
In 2007, we formally launched our company in Sweden and open sourced the first graph database, Neo4j, under the GPL. Two years later in 2009, we raised $2.5M in seed funding from Sunstone and Conor and acquired our first Global 2000 customer. One year later, Neo4j version 1.0 was released and in 2011 we raised a Series A and moved headquarters to Silicon Valley. In the last eight years, we have surpassed 20M downloads, launched Neo4j Desktop, and our latest product, Neo4j Bloom.
Today, thousands of organizations from startups to Fortune 1000 companies are using Neo4j to build new and innovative applications that leverage connections in data such as recommendations, impact analysis for network and IT operations, real-time routing for logistics and the next generation business applications such as master data management, identity and access management, content management, fraud detection, portfolio and risk management.
To address the growing needs of Fortune 1000 companies, we’ve ramped up our direct sales force. Graph databases are becoming a key part of enterprise data structure due to a lot of early groundwork laid through our open source roots. Later this year, we will start to offer a DBaaS version of Neo4j which will help us cater to SME, individuals, and even hobbyists. We also work to create a dedicated partner ecosystem which includes System Integrators, Technology Partner and OEM relationships as well.
Via our Startup Program we offer our Enterprise Edition and Visualization tool Neo4j Bloom for free to companies with under $3M in revenue. This has proven to be an amazing way to generate awareness. Startup Program members that have been through the program have been acquired or grown into household names and it’s a great way to spread our technology — for example: Medium, Shutl (Acquired by eBay), SOUQ (acquired by Amazon), OneFineStay (acquired by AccorHotels), Sensity Systems (acquired by Verizon) and Lending Club.

What are your goals for the future?

We are most focused on continuing to grow the graph database category, as our product is a widely used, open source platform. There is a growing market and we’re finding more and more use cases for graph technology. As mentioned, we’ve seen our technology used to help cure diabetes, accelerate our missions to Mars, and push the boundaries of human knowledge. The same technology that revs the recommendation engines for online retailers is also addressing climate change and detecting fraud.
As it stands, there is still a fundamental piece of the data landscape that remains unaddressed and touches everything from artificial intelligence to advanced analytics: figuring out cause and effect and the relationship between the two. We want to solve for this by connecting the dots and it’s through graph technology that we can evangelize and raise awareness around this central part of the data landscape.

What are the biggest challenges you’ve faced and the obstacles you’ve overcome? If you had to start over, what would you do differently?

The point where it felt the most hopeless was early on in our history. It was early 2009 and we had been out fundraising for about a year. One year prior we were completely shut down by the 2008 financial crisis but bounced back and got one of the best VCs in Europe to give us a term sheet. We went through all the motions, due diligence, etc., and completed the deal with roughly $2,000 left in our bank account. It was only then when we were set to finalize the deal that the firm told us they were going to pull out.
So, we hustled! We were six people at that time and on the following Tuesday, I sat down with the team and asked them for a favor: to get out and talk to customers. On Wednesday they were out in the street consulting. By Thursday we started invoicing those clients in advance and by Friday, we sold those invoices for cash. The next Tuesday, we had enough money in the bank to make payroll. It was an extremely dark moment in our history, but I knew we would pull through.

Have you found anything particularly helpful or advantageous?

One of my favorite books is Drive: The Surprising Truth About What Motivates Us by Daniel H. Pink, which has provided me with a framework for something that I’ve always intuited:
There’s something much broader than financial compensation that drives all of us. Western economics was built on the foundation that ‘homo economicus’ is driven by monetary incentives, but on the flip side there’s robust research proving that the opposite is true.
For non-monotonous, creative work, rewards based solely upon financial incentives actually lead to worse performance. This made me start thinking about the bigger picture of how motivation works. I realized that the answer is simple. After our basic financial needs are met, what motivates us the most are three things: finding mastery in our work, feeling autonomy in determining our future, and feeling connected to a higher purpose, something bigger and more meaningful than ourselves.

What’s your advice for entrepreneurs who are just starting out?

1. Don’t get worried about the competition.
When we decided to raise our Series E, the dynamics of our fundraising had completely changed as had the category landscape over the last few years. We went from category defining, into Amazon, Microsoft, Oracle, IBM, and SAP launching graph databases. It’s easy to get scared but the presence of competition is actually more beneficial because at the end of the day, our biggest enemy was people’s lack of awareness that graph databases exist. A lot of people have problems caused by data trapped in a database that isn’t actually a fit for them and don’t know that graph databases could be the answer. The competition is heating up and it serves to ensure we’re laser focused! It’s good for users and the market, and has only increased our investments in growing and enabling our open source community.
2. Make good growth decisions.
It’s so important for founders and young entrepreneurs to be fiscally conservative. Keep a close eye on your bank account and grow at a pace you understand, not just one you think you can handle. It’s also critical to hire the best people in the right markets to make it work. For example, our engineering hub is based in Malmo, Sweden, away from the Silicon Valley hype. In tandem, culture cannot be downplayed when building and growing a business. Hiring people who are excited to work on realizing the vision and maintaining the culture as you grow are the key players who will make your organization successful.

Where can we go to learn more?

Check out our website and blog! We love to engage with our open source community and can be found on Twitter and Facebook, and LinkedIn.
This interview is brought to you by OneUp, a tool to schedule and automatically repeat your posts on Facebook, Instagram, Twitter, Pinterest, LinkedIn, and Google My Business.

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