The Clostra Way
A letter from founder and CEO, Stanislav Shalunov
A new kind of startup, built to last.
Clostra is a company that combines the best parts of fast-paced startup ingenuity with long-term stability. I have built this company on integrity, on experience, on innovation and lifelong passion, durability and grace. Clostra is, simply put, the real deal. We want to stick around, so we never take existential risks. Of course, we are exposed to calculated risk all the time—there is always the chance that a product or activity may not succeed—but we do not gamble with our company’s future. Clostra is privately held and I plan to keep it that way. We have been profitable from year one; we will be long after I’m gone. We are here to stay.
In many ways, Clostra reaches back to Silicon Valley’s root values. In early Silicon Valley, investors, founders, and customers stood on common ground. Unfortunately, as far back as the dot-com boom, increasingly diverging interests and incentives put these three groups at odds. Clostra, now decades wiser, returns to a model where every party involved can work together and wants the company to succeed.
I have been a part of the startup world for over a decade, and some of Clostra’s team members have been colleagues and friends for over twenty years. Some Clostrians have been doing what they’re doing here for their whole career. Others come from the military or the nonprofit world, big corporations or academia, linguistics or architecture. We make use of the knowledge, experience, and perspective everyone offers, from veterans with deep technological expertise to interns who can see with fresh eyes. Clostra is dedicated to applying everything each of us brings to the most interesting and important problems we can find.
What makes Clostra different is our focus on durability: as a business, in our relationships, and in our technology.
An excellent company can consistently produce excellent tech through expertise and sustainability. When you do something you care about for decades, you get better at it. Over time, we have gained the know-how and cultural infrastructure to build reliable products that solve real problems. Clostra deeply values learning from our mistakes. We can use mistakes as an opportunity to become better.
Clostra is made from the relationships with our team members and customers: cooperative relationships which will support the company for decades. This stability lets me offer all those we work with confidence in a shared future. Our customers can rely on the knowledge that we will continue to support and develop our products to their fullest potential, and our team, old and new, can build lives and careers within Clostra.
Clostra is built on a foundation of respect and integrity.
Clostrians are a deeply varied group united by values and competence. I believe that this diversity is a strength. People can come to Clostra as their first job or after a twenty-year career; they come from different fields; different backgrounds; with different expertise. They come here to work on problems they’ve never gotten a chance to solve before.
Clostrians can have so much more breadth than they would get at another startup because of the variety of projects we offer. This gives people the opportunity to explore different areas, grow, and take ownership of their work. The work is meaningful and interesting. Success is measured not in effort but in results.
I have built a company in which I would want to work—in each position. Clostra has been fully remote from day one: an ideal environment for people who are driven and self-motivated; people who produce results, not checked boxes.
Our management philosophy is centered around asynchronicity, trust, and accountability. We trust each person on our team and rely on their integrity. People track their own hours and work when it is convenient. A manager cannot monitor the process of someone's work as closely as in an office, so results, rather than time or effort, become the main and sole measure of output. I find that our approach respects the individual's ability to shape their own life and creates a better work-life synthesis.
Clostrians can design their own workflow and integrate work into their lives in the way that works best for them.
Remote work allows team members to create the life they want, wherever they want, without interfering with their work. Our philosophy is to work remotely in a way that makes the most sense for a distributed team, rather than transplant office practices into a distributed environment (which simply creates a watered-down office). We do not sit on video calls for hours, stressed and accomplishing nothing. Calls happen when they’re useful and video is used lightly.
Clostra allows each person to build the environment that they do their best work in. Where in an office everyone shares largely the same process, a distributed team lets each person design their own. Where habits as simple as pacing may be inaccessible in many offices, we offer freedom. Different people may work best in different settings, at different times, in different contexts. In a remote company with people in different time zones, nobody is expected to do their work the same way or during the same workday. We bring people into a culture where they are able to determine their environment.
Shaping their own workflow lets team members synthesize their work with the rest of their life. People spend nearly half their waking hours on work, and I have tried to make Clostra a company where that’s something that people are happy about. Interesting problems and a self-directed workflow make work a fulfilling part of life.
Read more about our workplace values »
We are not trying to raise venture capital because, frankly, I want my company to succeed.
Many Clostrians have experience at Silicon Valley startups. In each case, they found that these companies were not built to last. The Silicon Valley scene is a scattershot of mostly-hopeless single-product startups with a tiny chance of making it big. There’s little space for learning, rather than trying to hit on a success in a mass of wasteful noise. Clostra, in contrast, focuses on building expertise and improving over time.
The assumed goal of raising capital defines every new startup. There are only two types of “success”: IPO or a big acquisition. Both are exceedingly rare. Both have to happen within at most ten years from initial investment, because that’s when venture funds have to return capital to limited partners. Both involve loss of control over the company’s vision and future as soon as it becomes valuable to someone else. Innovation has been turned into a financial product: every startup faces the same very specific roadmap, which ends, with overwhelming probability, in failure.
Investors demand reckless behavior from companies to maximize expected value as part of a diversified portfolio. This is not intended to help them succeed. For customers, a company going out of business means losing a service they were relying on. For founders and team members, it means losing years of work and their workplace itself. For investors, it’s a small, acceptable loss.
That’s not a cost I am willing to pay. Clostra is independent.
Not participating in this game frees me from having to orient the company around it. We can work on the things that are interesting, important, and real, without worrying about making sure the company looks good to investors. We can try multiple things at the same time and incorporate everything we learn into a growing whole.
The future is long; I am not interested in selling control of the company or the company itself—the vision, the team, the culture—but individual products or assets might be spun off or sold. I cannot rule out entire classes of business behaviors for the entire future of the company. I can rule out being forced to build around them. I can focus on making a creative company that will still be around ten, twenty, thirty years from now and long after I’m gone. We can learn from both our successes and our failures. We can grow.
Building something better, with the fast growth and scalability startups are known for.
Clostra is 100% bootstrapped, has more than tripled its revenues two years in a row, and continues to grow rapidly. There are two basic paths to long term success, service and product. Service companies grow through extensive and ongoing increase in headcount. Product companies grow through increasing efficiency over time. I pick the latter.
Large organizations come with inherent inefficiency that I want no part in. To be truly successful as a service company, one needs a very large workforce which writes custom software for each customer. A product company builds software that it owns and can license to many different customers. We are building a scalable business without relying on huge headcount, while still providing personalized care to our customers. Clostra solves big problems with a small team.
We don’t sell our time—we sell results.
First and foremost, we are a product company. We often create with a specific customer in mind, but we always hope that each project will grow into its own product. As a startup without outside funding, it’s easy to fall into consulting (building software billed by the hour and owned by the customer) to make ends meet. Once you start consulting, it’s very difficult to ever stop, and I don’t want to get trapped in a service paradigm. We have never sold a single hour of our time.
The way to make a big impact with a small team is to own products. Any improvement to a product that comes from us, stays with us, and can be provided to other customers. Clostra offers support to its customers and builds products for specific needs, but we always charge for solving their problem, not for the number of hours we’ve put into trying.
Projects are created for problems. Decisions to continue a project are not decisions for the management but for the customers. There is no internal politics involved in resource allocation: resources are allocated by what the customers will pay to solve a given problem.
We are accountable to our customers, who know exactly what they need. We solve real problems for real customers.
Instead of trying to divine what customers “really” want through arcane rituals and tracks in the sand, we solve their big, present problems. We make solutions that address real problems. We are able to put the improvements made every time towards helping every other customer. The cooperative, long term relationships this creates with our customers are integral to Clostra. They are the solid ground on which we can build our company and our future.
Because we share goals with our customers, we have a foundation for long-term collaboration on real problems. I like to work with customers who are overlooked or underserved by Silicon Valley because their problems are neglected: fixing those problems makes a big impact, and, from a business perspective, we have a stronger comparative advantage. We look for big problems that require sophisticated technology, so our customers are often big themselves. This gives us interesting problems to solve, but more than that, it gives us the opportunity to change the world.
The world is going through an AI revolution.
Advances in AI have made it the right approach for a broad variety of situations in which it was previously inapplicable. Picture a world right after the invention of calculus. At that time, there was a great supply of problems that could be solved through calculus which had previously been addressed through complex, clever approximation. The state of the art in longstanding physics and engineering problems was easy to surpass with a simple differential equation. AI has been compared to electricity, but it is not an energy source. It is a modeling language. It is the greatest breakthrough in modeling languages since calculus.
AI does not apply to every problem. It is only suited to complex phenomena with an abundance of data. It has its limitations. But where AI can be applied yet hasn’t been, we can immediately beat existing solutions. I can't imagine how Clostra could have been able to improve upon the state of the art in gamma spectrum analysis without this new language. If we tried to outdo nuclear physicists at nuclear physics directly there would be no hope. And yet, the application of modern machine learning can express models that were previously impossible.
At any given point in history, there is a locus of innovation: one field that draws the world’s attention and innovative energy. This locus is the place in which advances are being made fastest, and often the place where we should operate. It doesn’t stay the same; it can change quickly. In the 90s, it was operating systems and the physical routing of internet packets. By the 2000s it was internet architecture and high level services. There was a moment in 2005 where the greatest minds of a generation needed to figure out how to hook up Python to a web server, but by now, it’s trivial. The locus of innovation today is AI, and it’s a giant leap for understanding complex phenomena. Clostra is carving out a place in the AI ecosystem, one that will be essential in years to come.
Our AI products are highly diversified. Clostra uses a broad variety of modern machine learning techniques within various projects: computer vision, time series analysis and prediction, reinforcement learning, spectral analysis methods—the works. Clostrians gain experience with a variety of machine learning applications in the context of a stable company with the flexibility of a small startup. At Clostra, I can offer engineers the opportunity to grow and learn. I recognize that not every project works out, so we make multiple attempts. Engineers get the opportunity to contribute to different products and learn different sets of techniques and how to apply them.
We work on software that is meaningful both technically and socially.
Ultimately, every software project must serve the needs of real people. I grew up under the oppressive regime of the Soviet Union. There, undesirable speech was unabashedly suppressed. This experience has borne a deep understanding of the importance of true freedom of speech, not only as an inalienable right but also as a vulnerable capability that can be stolen. Practical freedom cannot depend on the whim of any government. It is built out of the technological capacity to protect itself if attacked. Our peer-to-peer smart network, NewNode, makes silencing people much harder.
NewNode grew out of my lifelong interest both in distributed systems and in enabling free speech. The core technical team has worked together for well over a decade and was a key part of BitTorrent and later FireChat, two breakthroughs in peer-to-peer networking. Now, NewNode combines the two. Content delivery at a large scale is necessary to participate in the modern internet. Even at the individual user level, people need big software updates and video streaming. NewNode supports and creates the practical ability to share information at every scale, from suppressed snippets of text to multi-gigabyte updates.
Clostra is here to stay.
Clostra is both innovative and sustainable. We bring together the high-speed, high-tech ingenuity of Silicon Valley with smart, durable business practices. I am building a company that can benefit from experience, economies of scale, and long-term relationships—a company that gets stronger. At the same time, we hold on to the efficiency, nimbleness, and grace that comes with a small team. Clostra is a realization of the principles of owning what we create; of respect and integrity in everything; of solving real, hard problems; of building.
I hope you can join us.