Category Creation and Market Leadership with the CMO of 1Password, Melton Littlepage

To win in the long run, you have to be the king or queen of your category. And if you are not today, if you are the number two or number three player and the category leader is soaking up all the category economics, then you have a product and category problem and you need this. Like the CMO who is sure, we're the chief marketing officer, but we also are the chief markets officer. You have to create a market where that company can be number one. And if you don't have line of sight to that in your current product roadmap in your current category. If you are locked in to not being number one, it's incumbent on you. Your role as a member of the executive leadership team is to help steer the business to a place where you have an unfair advantage. You fight an unfair fight in every single deal. And a promising way to do that if your product teams can pull it off, is carve a path where you're embarking on a category creation journey.

Give us your background. So today you're CMO @1Password. Before we get into 1Password, let's do a little replay of your history in SaaS.

I think I'm in my fifth marketing leadership role in SaaS. I wandered into it, I was hired to be the general manager of the on premise division of a company that had two divisions. The one division was a product that we didn't have a name for. We didn't know if it was like a business service provider. We said, are we a BSP? Is it on demand? Like IBM was pushing that? This is long before the term SaaS or cloud was in the lexicon. It was back in 2004, but it was a true multi tenant software that was not configurable, not customizable. Configurable, not customizable, that we could deliver at scale. And that was the business, the future obviously. But the on premise original version of that was the Cash Cash. So I was brought on board to be the GM of the cash cow and just milk every penny out of that that we could to, you know, funnel into this new line of business and see where it would take us. And so that was my, my entry point. And that multi tenant software business, what now we would say SaaS. I took off like wildfire. So it was an expense reporting product line and the giant in the industry at the time was a company called Concur. And Concur was also an on premise product. And to buy Concur it'd be like a six figure deal, six months of implementation, highly customizable. To your every need. And in that same deal we would show up and we'd say we can get you set up by the end of the week and we offer. It's like 70% of the same thing. No, you can't customize it, but we'll charge you monthly. And if you don't like it, you walk away. And as we know now, like in the SaaS world, that's the winning formula. But nobody knew then. And so it was all hands on deck. Like we all had to figure out how to tell this story and we all had to figure out how to get buyers to let go of their death grip on customization and believe in scale and believe in letting somebody else run the application. Because then it would be up all the time, it wouldn't go down, it wouldn't be help desk calls. It helped them really understand. It was like a whole shift in mindset.

Was the biggest objection then like security? Or did it seem like I'm trying to compare it to like what's happening with AI today? Like is this. Is there a wave in there? You know, like what. What was the objection for people?

Yeah, I wish people would think about security. It was very much at the time on premise software companies would sell you in a boutique bespoke 100% custom for you solution. And there's a lot of appeal that it's not what works for my industry or not what works for the market in general, but it's what works specifically for me. And that's the way all software was delivered at the time. And so it was helping to reframe the idea of getting something that is just for me that is 10 times more expensive and takes five times longer to deliver. Is it impossible to maintain? And then you have to do your own training and your own support because there's no training and support materials that address your one of one situation.

Oh my God. It's like building like a Frankenstein website. Nobody on the team knows how to update the website. So you never change anything in the software that runs your business. That would be a nightmare.

Yeah. And so it was really just breaking the habit of anyone who'd bought software for the prior decade and helping them realize that there was an entirely new way to do this.

What was the company?

The company was Gelco Expense management. And then we were so successful doing that, we ran circles around Concur. They ended up acquiring us and I got on board and I started my journey. So I spent 10 years at Concur building these. What became like the core product of the company. But this true SaaS tool that could be implemented at the scale of a 10 person company, all the way up to a 10,000 person company and figuring that whole process out. So the timeframe was 2004 to 2014. It was while we were inventing what we talk about AS Cloud and SaaS now, but it was also building demand generation and building marketing analytics and thinking about free trial to buy and the product led motion. None of that was in the market just flat did not exist in 2004 or if it did, it was like super nascent by the time 2014 rolled around. I think we had, we bought most of the learning curve but we hadn't really figured out how to lead with the product. We were still leading with sales and leading with marketing. I think that the next generation of companies that come after that, the true product led growth businesses figured out a lot more of the story. But yeah, I felt like I got to be in that crossover between product and marketing and really figuring out the scale, affordability and reach problems all at the same time.

Do you think that has shaped your marketing playbook today? So from there you went on to. You had a bunch of senior marketing leadership jobs. Schoology, new relic, tenable. You're the CMO at outreach before 1Password. When I have CMOS on the podcast I like to kind of, you know, ask like what was your core skillset? Where like, you know, usually every CMO comes up from some path. They were a product marketer, they were a demand gen person, they ran the sales team. Which bucket would you put yourself in if you had to claim a school of marketing that you came from as cmo? Now what is it?

My path was I eventually became the chief solutions officer of Jilco. So the chief product officer role into Concur, concur already had a chief product officer. The founders, they were amazing. And so I ended up in this role of helping to bring the SaaS product to market and sort of the straddle between product and marketing. So I helped to build product marketing function. I helped build the demand generating function in a free trial to buy motion. And so I think that I would say that those were my areas of strength. If you'd asked me this a decade ago, I would tell you that I was really good at demand generation. I'm a engineer by trade. The systems thinking, the analytical planning, the being data driven one decision at a time, like really getting precise and targeting an ICP and following the flow of signals into what constituted an mql. And when Is it ready for SDR to follow up on it? Like I felt a decade ago, like great at that. I've learned since then in being the CMO at Schoology and leading marketing, at Tenable and at outreach and now 1Password. You can know a lot without being great at it. And it's a lifetime learning experience. I feel like the more marketing leadership experiences I've had, the less confident I am that I was a great demand generation, a marketer at the time. But I think that that's the way it is with multi time CMOs. You realize that you need to become data driven out of necessity and then you over index, you swing the pendulum too far and you stop really thinking about the buyer and you stop really thinking about the problems that they're faced and what motivates them to buy. You're really just thinking about numbers. And so you, you over index on capturing the 2 or 3% of companies that are in the market and you don't do enough to provoke the 97 or 98% that aren't. And so I've like, as a survival skill, I've taught myself to push back from the data table and be a little bit more open minded about the difference between making decisions based on what we can measure versus making decisions about the biggest problems that we need to solve.

There's like a wave of, I've talked to a lot of CMOs on this podcast and there's a wave of, I feel like a lot of people come to that conclusion eventually and you kind of realize like, it's like you want to measure everything in marketing and then you come out the other side and you realize this job truly is a blend of know art and science and that's what makes it fun. And if you get too far in the science side of it, you miss kind of like the creating a soul of a, of a brand piece of this and you learn over time that that is usually what makes such a difference. And I think we're, we're heading towards that. It's nice, it's refreshing to hear you say that because it's like so much changes and it's, it's nice to like understand the sort of timeless principles and that seems to be one of them, right? Which is measure stuff, use data, don't. It's, it's an advantage to be able to use it. But remember that there's a lot of creativity and emotional, you know, you're trying to evoke an emotion and get attention and earn trust and like all those things Matter too. They're just a little bit harder to measure directly, right?

Oh, you hit the nail on the head. My teams come to me frequently talking about marketing attribution and the need to have better attribution and tools for attribution and cleaner data for attribution. And I get it, like I was in that role once in my career. But you can't attribute your way to being hot, right? And if you're not hot, you're fighting for every lead, you're fighting for every deal.

And when you say hot, what do you mean? Like from a brand standpoint? Like, are you a hot brand? Like, do people want to buy from your company?

It's not yet the brand for sure, but even the category you're in, right? If you're, if you're the highest performing brand in an ice cold category, then you're still fighting for every single deal. If your category is hot and you're the number two or three player, you're going to do great. Like you're in a campus environment. And so we, we have to market the category and keep the category strategic. It has to be above the line as a priority for the target buyer.

Do you have to create a category? Can you play in an existing category or do you have to just to build on the concept? This is great, by the way.

I'm a very big believer that to win in the long run, you have to be the king or queen of your category. And if you are not today, if you are the number two or number three player and the category leader is soaking up all the category economics, then you have a product in category problem and you need to select the CMO who is like, sure, we're the chief marketing officer, but we also are the chief markets officer. You have to create a market where that company can be number one. And if you don't have line of sight to that in your current product roadmap, in your current category, if you are like locked in to not be number one, then you, you, it's incumbent on you. Your role as a member of the executive leadership team is to help steer the business to a place where you can, you have an unfair advantage. You, you fight an unfair fight in every single deal. And, and a promising way to do that if your product teams can pull it off, is carve a path where you're, you're embarking on a category creation journey and, and then at least you force your buyer into a decision.

Are you all doing this at 1Password?

Yeah, I'll give you, I'll walk you through how we're doing this because this.

Is great, this topic. The cat like, it's cool to hear you say. Basically my translation so far is like 20 years as a marketing exec. Still the number one is like Al Rees, Jack Trout, 1980, you know, whenever they wrote 22 immutable laws of marketing, right? You can either be number one. The way to win is you can either be number one in a category or number two is if you can't be the number one in category, create one that you, you know, you can win in. A lot of people listening listen to this podcast, have read that book. They've read Play Bigger. I think a lot of them believe in the, they get the concept. But where we see a lot of discussions in our community is like, what does that actually mean to create a category? Because then we go and we make these kind of like micro, like we, you know, we're the blank and blank that does blank and blank in it. And people are like, we're the only company that does it. So let's, let's talk about how you're doing it at 1Password because I think people struggle with the, they get the concept, but putting into practice and like naming it and what is our category is a whole topic of, of hot discussion.

1. Password is a password manager in our roots. We are 18 years old. We're north of 250 million of ARR. So millions of consumers are password customers. And so we're the leading consumer password manager, but we're also the leading B2B password manager. We have more than 150,000 B2B customers. That's the fastest growing part of our business. And, and so it's rare that you're, you're, you're number one on both sides of the coin, right? Number one is a consumer brand. Number one is a B2B brand.

Guys, just a tactical question because like, I love this stuff because like marketers, we want to use our facts. Have you, do you prove that claim? Like, because if you can, if you can say you're the number one and you can. The lesson, the marketing lesson is like, own it. So do you have like, did you do research? Do you know you have the most customers? I'm just curious as to like, when you make a claim like that, how do you, how do you own that from a marketing standpoint?

We hired a research agency to go out and determine who is the most used B2B password manager. And then we owned the result. And the result is we're the most used B2B password manager. And then no matter how you slice it, number of customers, users, and so that's a great business.

So is the category password managers, password management.

The category is password management, but it's an 18 year old category.

It's arguably older than that. It's the post IT note in my filing cabinet. My mom's got her password on a post it note on her desk. That's the original password manager.

And you would be surprised how many of those post IT notes are still around. I could go on and on, but the reality is passwords still create the greatest security risk in a business, right? And the sooner passwords are gone, the better it is for everybody. And we've had this journey now for nearly 20 years of trying to take the risk out of passwords, and there's still a long way to go. But something important changed in the market about talking about five years ago with COVID So in Covid, businesses rapidly sent their employees home, right? They closed the offices, everybody became a remote worker. And the IT and security teams were not prepared for that at all. There was nothing in their IT or cybersecurity tech stack that made that easy for their employees. And, and the larger and more traditional of a business, you were, the harder that transition was. And, and these companies hedged their bets, right? They, they put band aids and duct tape on their cybersecurity tech stacks and their IT processes on the assumption that people were going to return to work, right? So return to work has been this hot topic. It's no matter whether you're talking about real estate leases or culture or, you know, in our case, you know, IT management, there was assumption that eventually people would come back. But I think we all realize that that's not going to happen. We are now permanently in a new way of work. The tools that we have in IT and security were designed for the last way we worked in the office, on the business provided application, on the business provided machine. And that just isn't the case. When we sent employees home, we gave them agency. It was a total accident, right? Nobody knew this was going to happen. But businesses gave their employees agency to make their own decisions about how to be most productive working remotely. And the employees took advantage of that. And so they brought in their favorite SaaS apps from outside. They were like, I'm not going to be constrained by this because it doesn't work over vpn. I'm going to use Monday or Asana for project management. I'm going to use Figma for design. I'M going to use ChatGPT or Grammarly to help me write. And suddenly the employee is using this explosive number of applications, none of which are sanctioned by the company, much less even visible to the company because you're not on the company network. You might not even be on the company device. Like a part of the agency that people got working from home is if they preferred to use their Mac and not the brick of a Windows machine they were given, they use their Mac because they're just logging in to SaaS apps. That's the way we work today. And nothing about the cybersecurity tech stack has been able to keep up. So it's created a gap. And the gap is businesses don't know how to secure access to these SaaS apps brought in by the employees. The industry calls it shadow it, but it's just like productivity tools. And they don't know how to secure the personal devices, whether it's an iPhone, iPad or home machine because they can't put like mobile device management. Like who in the world would allow the company to put mobile device management on their personal device? And so it's a huge security hole in the business. And no one talks about this. It's an elephant in the room. You don't talk about something you can't solve, right? You go and talk about the things you can solve. And so we recognize that and we built a set of capabilities that, that can discover all of those applications being used and secure them, secure the access. And we can do that built on the foundation of our market leading password manager. And so we have all of the security bona fides but we also have the credibility of the consumer world preferring us and bringing this into their personal life. And so it's new and it's novel where one of one. And so the only way to bring this to market is not to show up and be the better version of something that existed prior to this tectonic shift in the way we worked. There's categories in our industry. It's identity and access management. Iam you would know it as single sign on through Okta or Microsoft Intro. We're not a better version of that. We do something that they can't do even on their best day.

Okay, let's talk about the marketing of it.

So if you do something no one else can do, a traditional marketing strategy of comparison where we are the number one in this or we are these three things are differentiated capabilities. This is our competitive moat. Those tools don't work because what you really have to do is you have to get the buyer to want to buy the category. Right? They're like, okay, this is the time I'm going to prioritize solving this problem I've never been able to solve before. And they have to put it above the line. It has to be more important than other projects. And then once they are invested in the category, then you have to show up as the category leader. And so that's the category strategy. So for us, the number one priority is to market this new category to our target buyer to let them know it exists that now, like, you've never been able to solve these problems before. The problems are new, the problems are important, and now there's a solution to it.

And so is this on top of like the existing business? Like, is this a new direction for the company? So you're like, is it like a repositioning effort or it's like, we have, we have a bigger problem and we can sell to our, we can sell more to our existing customer that might be buying us for like, you know, I bought the personal pass. Like, as a consumer, I buy it, but I happen to work at a company and like, oh, we should bring this into our company.

Ultimately, this is the third act of the business. Act 1, Consumer Password Manager Act 2, Business Pass, Board Manager, Act 3 Is this new category. And so it will be the future of the business. And the faster we can get there, the better. Right, because we know. So your audience are students of category development. If the category lands and it becomes a priority across the community of your icp, then the category leader emerges with unbelievable economics. They have larger average deal sizes, they have higher win rates, they have shorter sales cycles. They go into every deal in column A, Right. They're not column B and C trying to fight for deals. And so our strategy is make the category important and emerge as the category leader.

Okay. Tactically, did you say what the category is? People want to be like, all right, I get it. What's the category like? What did you call the category?

The category is Extended Access Management. It's the second generation of identity and access management, iam. And so Extended Access Management allows us from a naming strategy, it allows us to connect with the legacy category and signal that we are the advanced or second phase extended. It could have been next gen Access Management, but it has that connotation and the abbreviation xam Extended Access Management. It's just, it's catchy. So XAM is the category Extended Access Management.

Was this in progress? Like, you joined the. You're coming up on almost two years. Did you join like and this was a new thing, like this is what we're going to go do or did it happen prior?

It, it came together in my, I would say my first nine months.

Okay, all right, so you come in nine months in. We're going to, we're going to create a new category. We're going to go here. How did you do it? Right? You had the idea to do it. What's the like the kind of short version of like, did you, did you come up with it internally? Did you hire someone externally? How did you shop it around? How did you get the company on board with like, all right, hey, we're going to go create this new category.

Our product organization, our product leaders. So our CEO and that the product leadership team came up with the, they identified the pain in the market and the need and they came up with the outline of what has become the extended Access Management product xam. And we didn't have a name for it, we had an internal code name, a reference to an onion because there's layers to what we extend out into the wild. And so I recognized it as soon as they brought it to the table, I recognized that it is an entirely new category of software. And I articulated the options that we have. Like the one option is category creation, right? And it has all of the risk. We would be first, we'd have to invest a huge amount of money and energy in marketing the category even before we started marketing the product and it could flat fail or we could take it to market as a number seven into the existing IAM category and then fight on a differentiated story. Use the market leader if you have this set of problems, but if you have this other set of problems, use us and then try to be a better for some people version of a 10 year old category. We debated that for quite a while because there's soft assurance of being in an existing category. There's, there's already a budget for it. There's already a team in our target customers responsible for it. The capabilities are defined, the leaders are all leaders have a mixed reputation. And so there's ways to take advantage and find a gap in there, find a little bit of blue ocean and then capitalize. I think we could have pulled that off and it could have become a multi hundred million dollar line of business. But for it to become a billion dollar line of business, like for it to really be a cybersecurity defining capability which we think it is, then we had to take all the risk and lead with a new category and then pull our buyer and the attention of the buyer and really the entire community pull their attention over to it and believe that once they see it, they'll recognize it and they'll jump in. And that's the whole marketing strategy. So I'll give you an example. Our buyer is a cybersecurity buyer. They don't want to be first to buy anything, right. Because that's a lot of risk. What if they get it wrong? What if that purchase and not the other purchase creates a vulnerability and their business gets breached? But they also don't want to be last, right? Because if everybody is moving in the direction of securing something and they don't and they're breached, then that's a huge black mark. And so they want to be in the safe middle of the pack. And so the pack is actually really condensed in this buying community. You don't see this, the flat version of Geoffrey Moore's Crossing the Chasm. It's a super narrow and very tall version of the normal curve where it moves quickly or it doesn't move at all. What we need to do is we need to form that consensus in the security community, actually get inside the mind share of the buyer and have them collectively believe that now is the time to solve these problems. Solving these problems is this category and then have them embark on that and then trust that we'll emerge as the category leader. And so we leave nothing to chance there. We have a massive analyst relations program where we're trying to bring the Gartners and Foresters and IDCs along on the journey because if they believe in it and recommend it, that gives it clout. We are working hand in hand with CISOs and security community forums and roundtables and the Chatham House rules, like sort of backroom conversations to just provoke the conversation. We're leading with thought leadership and leading with the category point of view and we're putting it all on the table. And what we're just trying to do is get the herd mentality going because we know that if we can get a thousand customers to buy, then the next 10,000 are right behind them. And if we can't get the first thousand, then it's going to be a street fight for every deal for the next 10 years and we don't want that.

All right, so how do you do it? People that are listening are itching to hear. How do you put this strategy into play? What are the tactics?

Tactics starts with having a really bulletproof category point of view and and so again, you're not marketing your product, you're marketing the category. And it starts with the elephant in the room problems. They're widely recognized and never discussed because they're just unsolvable and associating pain with those. So using research, using facts and saying that these problems exist, you have no idea where your data is in these apps brought in by employees. And when the employees leave, they take the data with them, or maybe they have access to your systems forever and you just don't know. That's a huge problem. Why is that a problem? Second line number, like 68% of data breaches result from compromised access to systems. People aren't breaking in and hacking in, they're logging in and stealing your data. It's like, okay, well now I have a real problem. And it's very obviously consequential because industry says basically three out of four breaches that become reputation damaging or ransomware attacks start this way. And they say the right way to solve that is to find all of this IT and then block people from accessing it until they store their credentials very securely and use the most secure way to log in. And once you've done that, you've pretty much wiped out the risk of this. And if you can get someone to that third stage, say, yeah, I have that problem. Yeah, that consequence is a real risk for me. And is the answer really that easy? Then they're hooked on the category and they just need to figure out how to do that. And so we lead with that story everywhere. Following the play bigger model, we do lightning strike events like the big industry conference for us is RSA conference. It's the largest security event. So we had like a massive lightning strike moment there to unveil the category. We also launched our product, but the focus was on the category. We met with 25 analysts. We met with not just the industry analysts, the financial analysts that are also plugged in and influencing and shaping CISO opinion. We held meetups with CISOs where we walked them through one CISO to another, the category strategy. And we got them to acknowledge the pain and be open to evaluating the solution if a solution presented itself. And then the last act is to present our solution in the context of the problems the category solves and as something that is different. Right. And so now we're confronting our buyer with the choice, right? Instead of saying you're going to buy one thing and you can choose from flavor A, B or C, now we're confronting them and saying you're going to buy a or number 2 or 99. It isn't choosing the best amongst something that's similar. We're truly forcing them to make a decision. Do I go left or right at a fork in the road? And so by presenting ourselves as different from everything else, we at least provoke, you know, that, that moment of should I go right? Right. Should I take the modern approach? Should I solve these problems or should I stay with my original plan? And we're doing surprisingly well there by provoking a decision instead of following the natural flow there. I think a lot of marketing and sales teams, they want to follow the natural flow of a purchase decision because you know how to acquire that lead, you know how to score that lead, you know how to qualify and route that lead, you know how to pitch that lead. And then you know that your win rate is 25 to 40%. And so you're gonna win some, lose some. I mean, I think that's really comforting to a lot of marketing and sales teams. They just want to, you know, put money in the bank, put runs on the board. But we're not following that path here. We're saying we're willing to go all or nothing up front. Right.

What does the marketing org look like?

So if you looked at it organizationally, you would say it has a pretty traditional structure. Corporate marketing and communic as a team, growth as a team.

How many people are in the company and then what is the size of the marketing team?

We're north of 1,200 employees. We have about 80 people in the marketing organization, which includes product marketing. And while we may look similar for a growth SaaS business, what sets us apart are a couple of things. We have a global advisory CISO as a direct report to me, as a member of our marketing leadership team. He's a former CISO and he's an evangelist for us. And he is.

So you're like a subject matter expert as the helping you with the strategy. Like we're trying to sell to this Persona. We can basically play, run inception.

Not exactly though. So you would think that, but it's actually slightly different. He's in the CISO communities and he has access to a lot of the target Persona that we'd like to sell to. And he's allowed in there and he participates in there as a peer because he is a former ciso. But if he showed up and started pitching the product, he'd be sent to the road immediately.

I just mean from an intel, you have someone who would be your customer being a part of your team. Which is smart from a knowledge standpoint, not, not having them be a shill for, for one password just. But from like a, this is the person who might, who would buy our product. We have them on our team to hey, does this messaging land like that feels super valuable.

Yeah, I mean that's helpful too. But there's, there's actually a really strategic role here. When, when he is in the CISO community, he, he can agitate for the problems that the category solves and he can highlight the pain and he can talk about the solutions that the market needs and so he can do all of the work in terms of fomenting rage amongst CISOs that there's not a solution to these problems and then leading people to the desire to solve them. Because I talked before about being hot. If you're not a priority in the community of people you sell to, you're not hot. You may be valuable, you may be a point solution and they may need to purchase and implement you to get a job done. But you're not going to become a de facto standard piece of every business on the planet. And we want to be a de facto piece of every company on the planet. We want to be embedded in the blueprint of the cybersecurity tech stack. And so to do that you have to win the hearts of the CISO community. They have to really believe that the problem is so important that they would prioritize this over another problem. And believe me, they have tons of problems to co solve and they would need to believe that it's a low risk, high value solution. And so our global advisory ciso I wouldn't say stirs the pot, but I would say is provocative and opens people's eyes to the problem because if their eyes are open to the problem, their hearts are going to be open to the solution. That's a non traditional view of our marketing team. And then we have transitioned from pure product marketing to solution marketing so that we can talk about these pains directly and talk about how we solve these pains in a realistic way. We can hand the roadmap to a security buyer and say, you, you know, this has been a priority of yours for years and you can't solve it. Here is the roadmap to solving this problem. And then yeah, I mean you can solve it with maybe other tools, but we can provide the tool that makes this possible. And so again, we're leading with the problem and the solution to the problem and trust that it will come back to us as the vendor of choice. But that's the like that's, that's how we are trying to wedge ourselves in and, and become, you know, a household name for every security team in the world.

You got a traditional kind of split for the team. There's roughly 80, 80 folks on the team. What are the best channels that are, that are working for one password right now? And like, and do you have a, do you have like a high volume self service business? That's the consumer thing. And like how does the, how does the marketing team shape where they're, they're focusing the effort? Like, does the high volume, you know, do you have people split across that funnel? I'm curious to know some of the dynamics of the team.

So we have three motions in the marketing org and you hit on the first one, which is self service product led growth. It's both on the consumer side. It's also for small businesses. So small businesses and consumers both purchase directly. Completely served by marketing, self implemented all the way through renewal, completely touchless. It's a phenomenal business. And having millions of consumers has created a flywheel. It's a B2C to B2B flywheel that allowed us to grow. We launched our B2B product in 2018 and we've grown massively like 150,000 B2B customers today. And a lot of that is on that back of that flywheel. The reputation and the prior use are just consumers bringing us to the office with them. And, and so having 150,000 customers gives us 150,000 renewals a year roughly, which is a great opportunity to cross sell. And so the first act of our XAM category execution is cross selling into the base. And so we already have a delighted customer that's getting great value and stepping them up to the next set of problems to solve and the next set of jobs to be done which are still relevant to the same buyer. That's a cross sell execution challenge. It's hard to do at scale. It involves a lot of scale storytelling and then the hard work of a massive customer success organization. But it's proven to be very effective for us. And so that's step one. Step two is being the market leader in B2B in a category password management that still has a ton of demand. We get thousands and thousands of inbound high intent leads. People are coming to us to solve this problem, recognizing that we're the market leader either because they've used us in a past life or used us as a consumer. And so using that high intent lead for our original product. But Doing discovery in the first sales call and saying, well, do you have these other problems? Are you challenged by this modern distributed work environment and hybrid and bring your own device if that's a challenge for you. We have these other things we can offer. And so springboarding off of that high intent lead, which we're going to win a lot of those in really short sales cycles. Springboarding from there to a much bigger story with a lot more value, is great leverage on our existing business. Between those two motions, we're in thousands of XAM sales cycles, extended access management sales cycles. Before marketing runs our first campaign like before we put our first dollar to work marketing the XAM solution. And then of course the third act is, is really getting loud with our category strategy and then the demand generating solution marketing programs behind that that really, you know, provoke demand for people that aren't current customers, that aren't looking for a password manager, but have these chronic, you know, elephant in the room, I don't even talk about them. Pains that are now solvable for the first time. And so with those three legs of the stool, we're able to do demand generation just for the future platform and then run those through a traditional sales LED sales cycle.

What's different about moving the company into enterprise in the fall? You all were part of some, some golf stuff. This is the first CMO that I've had on in a B2B context, B2B software context that's doing sports marketing. What are you doing there and where does that fit in the mix?

Yeah, we're passionate about partnering with champion level franchises and using sports marketing to really tell our story. We arrived there by doing a lot of homework. We hired a third party that took our. This is gonna sound nerdy, but we have our buyer Persona documents really well researched. We handed those to an agency that was able to use Nielsen data across all possible sports sponsorship opportunities. And they really found the intersections of something that fit our brand personality and something that was just in the heart of our buyer. And beautifully for me, there was true alignment between our B2B buyer and our target consumer buyer. And so we knew that we could find a way through sports to reach them when they weren't at work.

Meaning like you kind of get it two for one. Like the consumer might see that content somewhere and it's relevant to them. It's going to be relevant to someone whether you're at a business or a consumer.

Well, I mean, yeah, so like these sports sponsorships are expensive. You build a business case on the B2B buyer. But every time, like if you're a B2B software company and you're sponsoring a player or a team or a sports event or a stadium, you hit your buyer. But then 99% of the people in the audience aren't your buyer. And so there's this huge overspray, right? Well, in our case, the, we hit our target buyer, which is the 1%, and then the other 99% are also our consumer target buyer. And so there's no miss. Like we, we can't possibly advertise in whiff on our target audience if it isn't our B2B audience that sprays past them into the consumer audience, which gives us a lot of confidence. Like when we ran the business case, we did a major sponsorship. We were the title sponsor of the President's cup golf tournament in the fall. It's a, it's an all star game in golf. It's wildly popular. Tens of millions of people tune in live to watch it. And being the title sponsor means in the background of the television coverage, like you can't escape. But it's not a commercial. You just see our logo everywhere. And we were able to justify that two ways. One, we were going to saturate our B2B buyer and the business case there alone was enough to justify the investment. And also we were going to saturate our B2C buyer in the business case there alone was enough to justify the investment. And so knowing that we were going to achieve both gave us a lot of confidence to move forward with the investment. And the reason we did it, like following the data, we knew that we could reach our buyer when they weren't at work. Now you could also do that with a television commercial. But the thing about sports that's magical is when people are fanatical, the sports fan, it's irrational. When you're a golf fan, you're passionate about golf, you soak it in your mind and your heart are open. And, and so we want to rub off some of that fanaticism onto our brand. And we know like as marketers, like the, again, going back to the, the non measurables, the, the buyer chooses to buy with their heart and then they justify the decision with their head. And so much of our marketing is we're marketing to the head, right? I can market the ROI analysis, but that's a justification after the decision has been made. I can market speeds and capabilities. But that, that again is a, it's an intellectual argument. When I market to the heart, I'm like you talked about it earlier, I can build trust. I can, I can have someone have confidence that this is going to work. It's going to help them really add value to their business. It's not going to put their career at jeopardy.

I feel like at your, at the scale of a 1Password too, and especially if it's the first time doing that, I think people are watching that on TV and they're like, oh, hey, cool, one password. Like it's, it's a. If it's a known brand in the space to see creative, especially at a sports event like that for the first time, it can work and can do something just technically. What do you, what is that, like, saturate the B2B buyer mean? Is there like a certain number of impression, like you're trying to reach a certain number of people and you, you know what your market is, or is it more of just like a philosophical kind of thing?

So like not saturated in the term of like fill them to overflowing? Maybe a better way of saying it is we can reach them repetitiously when they're not looking for us. We can put a lot of impressions on them, I think is how we would have said it a decade ago. What we're really trying to do is we're trying to look like the market leader. We are. So when you think about the other title sponsors of golf, you end up with companies like Coca Cola, AT&T, BMW, Accenture, and now 1Password. Right. And so we're trying to put ourselves in that echelon.

Oh, it's such an amazing marketing lesson. Like if you're at a company, if you have the budget to be able to do that, such a. That's just like a gangster brand move which is like, put us at the table with all of these people and now this. Oh, yeah, I see. I see them on the same scale of BMW, especially from an enterprise standpoint, that legitimizes us. Man, that's cool to hear that. Because it's just another way of measuring the success of it and thinking about it other than like, you know, did we generate, you know, more signups than this other period in time? Right.

Well, totally. So again, I talked about this earlier. If, if all you did was count website impressions and signups, you would miss like the real value here. That. The real value here is we're, we're running our core business. We are, we are in thousands of sales cycles each quarter. And if we have the reputation of being the leader and it's visible, like it's undeniable out in the marketplace. We force the buyer, if they're, if they're leaning towards our competitor, we force them to acknowledge that they're buying number two or number three or number four. Right. And nobody wants to do that. Nobody wants to know who the market leader is and then buy someone else. Because you have to have so much confidence in your decision. Like why am I bucking the trend? Why am I seeing something other people don't see? And so if we give them pause and say why, why am I doing this? Why am I not going with the market leader? It's going to shift their perception and their decision making process and it will absolutely result in us winning a higher percentage of those deals we're in and the deals that we were going to lose, it's more likely to shift those to no decision. Right. And we'll have another chance, another bite at the apple in the future when that person dusts themselves off and is ready to rethink about a purchase process. And so that alone is the business case. Right. And that is purely from appearing in the market as the undeniable category in our case, you know, solution leader. And, and then for people that were saying like one password, like what's a one password like and that was a very common Google search during the four days of the President's Cup. It allows us to tell our story to someone for the first time. But the story we put forward was the new category story. Like we positioned ourselves as so much more than a password manager. And so that allowed us to start nudgin the future buyers towards the more important, bigger ticket, a more capable solution without taking anything away from our consumer business.

Okay, I got like a 50 follow ups that I want, I want to, I wish we had more time to keep going because I feel like this could be a, this could be a, we could turn this into a three hour session. So maybe there'll be a way to do that. But Melton, thank you for coming and hanging out with me. It'll be interesting to see the messages and feedback you get after this because there's a bunch of people listening that are going through something similar to their company or want to take their company through creating a new category. And I think oftentimes we think of it in the context of like a startup like creating a new category from the beginning. This is a company that's been around for 15, 20 years. Right. And is now going through it in a new way. So it's cool to hear that journey. Thanks for hanging out with me and sharing some of the 1Password story on on this podcast.

I appreciate it, Dave. It's been a blast being here. Thank you so much for having me.

All right, man. Thank you so much.