The rise and fall of a database-as-a-service Latvian unicorn

This chapter presents a postmortem analysis of the collapse of a Latvian enterprise software company Clusterpoint that attempted to enter the global market with a Cloud-based database-as-a-service (DBaaS) offering to compete with MongoDB and other vendors in the NoSQL database category. The beginning of Clusterpoint is dated back to 2006 when three co-founders established the Clusterpoint Ltd. Company in Riga, Latvia. Clusterpoint developed its proprietary, closed source Clusterpoint database software and sold it in the local Latvian market using traditional enterprise licensing model. In 2015, Clusterpoint used more than 2 million EUR for launching its Cloud-based DBaaS offering and entering primarily the US market. In 2016, it was recognized by market research agency Gartner as one of Cool Vendors in platform-as-a-service (PaaS) segment. However, by the end of 2017 the company was unable to attract another investment round for financing its operations and was forced to file for insolvency due to liquidity issues. Research results suggest that the main reason for company collapse was related to the inability to achieve product/market fit due to the lack of Clusterpoint integration with the major Cloud infrastructure vendors (Amazon WS, Microsoft Azure, etc.) and its focus on closed-source business model. The effect of these two factors was amplified by premature scaling. The authors use the research method of an empirical case study and postmortem analysis approach, analyzing the outcome in the retrospect (doing the "research-in-the-past") of a completed project. One of the co-authors has worked as an employee at Clusterpoint during from February 2015 till March 2016.