Building Trust and Credibility - Thomas Pederson - Bunny & OneLogin - Episode #57

You know what's sexy? Closing a billion, closing a million dollar contract. That's sexy.

Welcome to Not Another CEO Podcast. I'm your host, David Politis. Every week we talk to inspiring leaders and get the true stories, the ups and downs, the lessons learned, and come away with actionable advice for our own journeys. Today's guest is a serial founder with a track record of building category defining SaaS companies. He co founded OneLogin, one of the first cloud based identity and access management providers. After exiting onelogin, he took a short break, but not for long. In 2022, he launched Bunny, a billing platform optimized for B2B SaaS, including quoting revenue, recognition, analytics and everything else you need in a billing platform. The idea came from firsthand pain he felt at one login. Unlike Onelogin, where he raised $175 million, he has decided to bootstrap Bunny. He's originally From Denmark, ran 1 Login While living in California, and is now coming to us today from a boat in the Mediterranean. Please welcome co founder and CEO of Bunny, Thomas Pedersen.

Thanks, David, and thanks for having me.

I'm so excited to be doing this. I know you don't do a lot of these podcasts, so I'm really excited that you that you're doing this with me. All right, jump right into it. What is the one thing you've done at Bum Big or Small that's had the biggest impact and you'd absolutely do again if you're CEO of another company in the future?

Yeah.

So this is not very profound, but.

It really makes a big difference. You know, companies are all about the people and when you start your first company, you're hiring a bunch of people that don't work out. So the second time around you kind of know, you know a lot of people. And we've been logged to bring over a bunch of engineers that we knew and trusted from one login. And that just makes a huge difference in terms of we know their strengths and weaknesses, they know us, there's a lot of high level of trust and we can execute really fast.

How many people would you say? I mean, how big is Bunny today?

People wise, we are still a small team. We are seven people.

And how many of the people came from Long and we brought five over.

And then we met one other guy and yeah, so that's where we at.

One of the things, because I've talked to some other founders who, I mean, myself having been through this, you kind of think to yourself, man, I wish I could go bring that team back together, all those great people, all of that. One of the concerns I have when I think about my next business and how to do that is those people are at a different stage of their lives, let's say, or their careers and they may need things that they didn't need before comp. You know, like how. How do you think about. Does that make. What I'm asking makes sense? Like, how do you think about that?

Yeah, it makes no sense. I mean, a bunch of people we brought at entry level in non engineering roles, they've kind of, you know, they're way further in their careers now and we could probably don't have anything to offer them. But engineers a little bit different because there's a lot of people who are just individual contributors for life. That's what they like to do. They like writing code. They have that entrepreneurial spirit. And those are the people we brought over. But there are people that were in customer success and marketing and so on that we just, we can't access at this point. We also don't need them yet, but we would have to hire. Maybe we'll hire them as managers at some point and they will bring in people that they trust and know how to work with.

Yeah, because one of the things, I mean, at least from what I know of one login, obviously we knew each other well in a similar space. What I know of the culture. I have a feeling, I have a feeling you probably have a lot of people asking you can I like, hey, you need, you need a head of sales. You need a. Like my, that's my assumption just based on what I know of the culture. And so that's kind of why I'm, you know, it's like, how do you even select those people despite a lot of people waiting, like want to get hired.

It's kind of interesting because, you know, at some point now we've kind of been into Bunny a few years, people start coming out of the woodworks and sometimes when they're looking for a job. Right. They can just see the timing. Oh, that's what you want to meet. But I definitely people I think I can pull, you know, out of a current job when we need them. Because I think we had a really good contract at Warlogin and I've had a lot of people come back either directly or through other people saying, you know, that was like the best job I had learned so long because I think. And you could probably relate to this. It was a grind. And so you, you create some strong bonds with your Colleagues when you have that kind of environment and you also learn a lot. Like it wasn't just a huge tailwind. Like it wasn't easy for us. It was, it was a lot of work.

I actually think, you know, when you say, I think that the grind that is where you build better rel, you know, stronger bond than if it's so, so easy. And so, you know, I, I. For a long time I became kind of obsessed with Everest. Not climbing Mount Everest, just the idea of like. And reading about all the people who've climbed it. And a lot of people talk about how it's like in the tough camps, Camp two, Camp three. That's actually where they build these relationships and their own skills. And so when you say that, I actually think that people have been through those grinds and the businesses that are like that as painful in the time, the moment that it is those, those are the bonds that people actually look back. Remember when we did this and we had this issue, you know, and then those are the people that really want to come back and do it again with each other. Yeah.

I mean the people you own a high five, you don't really get to know them that well. But when you have patched on the people's wounds and you know, treated that trauma that, you know, you know, different level.

Yeah. Well, the one person who you is the same as one Login and to buddy is your brother. So. So your co founder in both of the businesses. Can you talk a little bit about that? Maybe we can go to the one login to start like at one login. Was that an obvious thing to start it with him? Did you always know that you wanted to do things together, you know, back, back in those days?

Yeah. We are three years apart. I'm the older and we were both in software. I got him, he actually started to become an electrician. And then he has got tired of that and said, well, you should learn some Perl. And that was back in the 90s when everybody was building websites. So we got into Perl and then you started making a career and he had a little web agency as well. And then when I moved to the US in 2004, we became really close. It was like, I wouldn't say we were close, but not super, super close in Denmark. And we maybe see each other once a month even though we live very close to each other in Copenhagen. And then he started coming over every three months. And that was just about the time when Facebook came around and Rubri and Rails became a thing and Zendesk started building their product and I knew those guys and I was like, yeah, I want to start a company as well and it'll be great if I could do it with my brother. So I kept throwing ideas at him and he was like, eh, I don't know, this is a bad idea. I mean some of the ideas are just laying and over time your ideas just get better and better. And he had worked at a consulting company, Denmark, that did remedy implementations. Actually it was run by Miguel Sven, who later started Zendesk, which is why he started Zendesk, because remedies just sucked. And so I was helping out at Zendesk at the time, like very, very early on in 2009 and maybe it was in 2008 and we had customers who were like, you know, now this is a great app, but now I have another set of credentials and users to manage, like, okay, I should build a solution for that. And so my brother had experience with active directory because everybody wanted to think their users from ad. I'm sure I did the same thing, better cloud. So okay, that's a good idea. So then we decided to build a prototype and that was maybe the fifth idea that I came up with. And so, and that's kind of the way it works with us. If I want an idea shut down, I just run by him because he most likely will. So if he green lights it then something there.

And then, and then. So you both exited from, from on login and then when you were building Bunny, did you immediately go back to him and start throwing ideas and it goes it the same thing over again or you already knew at that point we're going to do another thing together, you know, or how did that happen?

Yeah, I mean I knew pretty much right away he hung around at one logging a little bit longer than I did. And because he was able to add value per his knowledge of the product and infrastructure, I was just like a figurehead at the end. So I started running ideas by him again. And I basically said, I don't want to start another company unless you deal with me.

And how is that to be together, doing that together? I mean I, you know, I, I have a sister, I don't have a brother. I've got two sons though, who are a couple years apart. On one hand, I dream of them being in business. Like literally when you tell me these stories, I dream of them doing this. And then sometimes I'm like, they will not make, you know, if they do this, I don't know, you know, if they'll make it through together. You know, how is that relationship and how does that. That. How do you divide responsibilities? Very clear. You know, what everyone's responsible for. Because I think at one log, you kind of maybe alternated or change jobs, you know, kind of throughout the years.

Well, that was more because we brought in a CEO. So then I became cto. And so we found a new role, like just a title. But he. Basically the same thing. We're both technical, but we have different technical skills. I would say I'm more focused on the business side and product design and product vision and UX and those types of things. He is more, you know, platform security, scalability, like the deeper level stuff. So if that's something. I remember at onelogin when we found out, because we didn't know this when we started one Login, that there was something called. So I said this Samo thing, can you figure out how to work? So he got to work and figured it out. But that's kind of the way it works. He's more hardcore than I am.

Got it. Now you're building Bunny, I would say, in many ways, many ways differently than you build one log in many different ways. One of the ways, clearly, I mean, everyone can see your background and where you are. You were in person for one login. Yeah. And you're clearly remote for Bunny. Did the. Did the in person for one login? Was that not important? You know, was that not important this time? Did it not work that time? Like, why. Why do it so differently? You know, as it relates to the location of you and the team?

It's more, I think, because we can. When we started OneLogin, we were based out of Santa Monica. And when we raised our Series A round from Charles River Ventures and they said, well, here's some money, but you have to build out sales and marketing. San Francisco. So for the next six, seven years, I commuted to San Francisco every single week. I've flown Virgin America on that spreads 500 times at least. And so this time around, where, you know, I'm not looking for venture capital, where anyone telling me how I can build the company now can do a little bit differently. Plus, the people that we hired are in different locations of New Zealand, Mexico, the Bay Area. And I kind of lived between Europe and the US And I think it works fine for engineering. I think that comes a day when we build out sales and marketing. I think those people benefit more from being in person. But on the engineering side, it could totally work. I actually think it works better in many Aspects.

So you were commuting every week?

Yeah, I had a work apartment first in Telegraph Hill because we won Osgood in the dinkiest office. Right in the same building as Unity. And then later we moved to Spear street and I got an apartment in by Moscone center. So I would fly off Monday and I, I was divorced and I had two small kids. So it was important for me to get back and see my kids every week. So I would be there four days a week in the beginning. Monday to Thursday one week and then Tuesday to Friday the next week and I'll come home and have my kids for five days and then go down and do it again. And yeah, it was, it was a lot.

Do you believe that the business was. You know, you and I have never actually talked about this. When we talked to crv and I don't know if we've ever talked about this, we talked to them and they were very interested in investing and they told me that we were in Atlanta and New York at the time for Better Cloud and they told me that they were interested, but only if we moved the company to San Francisco because we wouldn't be able to build a business like this. Not in San Francisco.

Right. Yeah. And I think that was definitely the thinking back then. You know, Zendesk first moved to Boston because that's where CRB was. And then Benchmark said when they did the B run, no, you have to move to the, to San Francisco. So go figure, right? That was a bigger dog in that room after the V run. I think obviously the Bear is still the capital of tech. Uh, but I think there's more options these days and especially if you're not venture backed. I think Covid has changed a lot of people's minds. So it's this whole thing about Silicon Beats. Some people talk about that in la, where I am, I don't think it's a thing, but it's definitely a lot more opportunities to, to build a SaaS company outside of the Bay Area now also. No, technology is much better. Like, look at us, we're sitting here like, perfect. Yeah, I'm. And I'm, I'm, I'm installing the Internet right now and it works pretty great.

Right?

Good.

Yeah. I mean, look, I actually, you know, I have met founders now from so many different building businesses out of so many different places. And I would actually, I would make an argument that just for the pure cost of talent, just the pure cost of talent, it's actually better, actually better not to do it in the Bay Area, you know, because I don't. I think at some point it becomes really hard to build a truly profitable scalable company with all of your talent there physically.

Yeah, it was, it was really tough back then because there was so much competition. So you're. Everybody's fighting the talent. It's impossible to get in your office space. It's five or seven year leases at super high rates. When Denders came to the bay to San Francisco in 2009, I think this, the. They got an office on, on Townsend and they were, it was $7 per square foot. The last lease we got was something like $85 per square foot within 10 years. That is crazy. I think rates have come down a little bit lately and you could get better deals now, but it's very capital intensive to scale in the beer.

Yeah. I went to one office. I'll never forget this founder invited me to his office and it was the nicest office. It was one of the nicest offices I've ever been to. Company losing money, had raised hundreds of millions and he showed off his view of whatever and he told me very Proudly, we pay $140 a square foot. I was like, well, I don't know if that's. We should be telling people we got a great supply.

It's fully furnaced. I think definitely not, not even $60. I mean, I think in the 40s maybe it was awesome. Good deal.

Another way, another way that you are doing this very differently is that you are not raising or have not at least to this point raised venture capital. Yeah. I assume that that's very purposeful and deliberate. Yeah. Can you talk about that? Because you raised a lot of money and you built one log into a big business with that money and now you're choosing to do it a very different way.

Yeah, I think also it was, it wasn't necessary with Malaga. We had a really strong competitor in Okta as you, you remember. And they were. When we had raised our, our seed round, I think we raised $150,000. They announced a $10 million air round. So we were on a, on a back foot already. It's, it's not like a two horse race in the space we're in. You know, billing has been around for a long time. There's just a lot of old players in the space and that's why we decided to go into that space. Plus there's so many SaaS companies as there's room for vertical play. We did a small friends and family round. Just, you know, we had People asking us if they could invest. So we said okay, we'll do, we'll do a round. But we are mostly financing it ourselves. We burst through that money pretty fast.

And what do you think is the biggest difference that you've noticed already between fundraising kind of day one and constantly fundraising versus the way you're doing it right now?

If that's one thing I love more in the world than anything like cocktails and pizza or anything, it's not having board meetings. Oh, I love it so much. And so because there's a lot of pressure when you have, you know, big money in and you start making more short term decisions and because every quarter right, you what's the quarter quality number going to be? And I really don't miss that part. It's super stressful. And you know, I never got much value out of board meetings. I was, I came out and feeling deflated. So I need like a day to recover after that. Yeah, I mean it comes with the investment of course, but I definitely don't miss that. So now we can kind of take on time. And you know, back then people need to really talk about PMF or product market fit. But that's a big thing now. And that's a really big difference between thinking well between when you think you have product market fit and when your customers tell you you have product market fit. Someone posted on LinkedIn the other day like 10 signs you have PMF and they were really good and I recognize some of those signs and we have been able to take our time to get the product to where it needs to be. And that's been really, it's still longer than we expected but I think it's for the better.

I really, I really like that this. When you think you have product market fit versus when actually have product market fit. That's a really. I actually not thought about. That's a really interesting. And when you have the venture money, you, let's say I want to be careful how you kind of forced to feel like you've product market fit before. Yeah, sometimes maybe before you actually have.

Yeah. And you're forced. Well, you're not forced but you, you're prone to making some shit. You sometimes choose to make some short term decisions and for instance at one login there was so much pressure on feature development because we were fighting for every deal with, with Okta and we've been very good at coming up with new functionality to sell, but we accrued some tech debt that really impacted developer happiness which is a huge thing in Kind of attracting and retaining talent and also executing because at some point that tech that just weighs you down and that's the thing we have overemphasized on at Bonnie based on all the experiences, like we really kept the stack very clean and it's made a huge difference.

Yeah, I think especially in the early days, having been through it myself as well. In the early, early days, those board meetings can drive you to do some things maybe unnaturally that you're trying to show customers momentum. And it makes sense. Like you said, they gave you money, they got to show return for the money. But in those early days. I talked to another founder the other day, he did raise a lot of money, but it's his multi time founder and he said, I realized we're going in the wrong direction. And earlier in my career I would have just continued to go in that direction because the board and the nurse and my team, he's like, this time I knew I didn't have product market fit and I just stopped everything, cut this entire thing and restarted with this new idea, same company, you know. And he said, but I would never do that as a first time founder because the pressure, the pressure is too, you feel like I pitched them, I told them an idea, they invested in that idea. The idea is stupid, but I should keep doing the idea because that's what I told them, you know, and I think that's, that's a lesson I really, I've been trying to pull from these interviews for people because I think that that's really important. Like you're the CEO, you're the founder, you know what's happening, you know, and, and if you really take the step back and again it's easy to say all this now right, when you have 10 million, 50 million, whatever it is, and the board meeting every quarter. And what do you think is the thing that is the hardest about bootstrapping that you didn't expect to be hard, you know, or surprise? Let me, let me say, well, I.

Mean you have money going out of your bank account every, every month on top of your own living expenses. And when you've had had an exit, you don't live cheaper than before you had an existence. So there's definitely a strain on the wallet. But I would say when you have venture capital, you spend the money a little bit easier, you know. Yeah. You know, you buy more expensive stuff, you hire more frivolously, you don't fire as fast, you tend to throw people at the problem. And one thing we've done at Bond is like, no, we got to automate. Automate, Automate, automate. And I think we can go for quite a while with, and with the current team we have, the next hire we're going to bring on board is not going to be an engineer. It'll be someone to support customers so that we don't have to do that out of the engineering team. But I'm going to try to hire as few people as possible and just make this, you know, just producing a lot of cash. Right. So that's the, that's a fun, the intellectual challenge here.

Yeah. One other thing that you're doing very differently this time than last time that I noticed, it's one of the reasons I reached out to you is I feel like you were, let's say, relatively quiet. At least you personally, you know, at one login, you were not out there and, and, you know, beating your chest and talking. I mean, generally speaking, you know, you, you, you weren't doing that, but you're, you're, you're doing more, not beating your chest, actually. Very thoughtful. I, I find your LinkedIn posts, I've been reading them for the last however many months, and that's why I reached out. I, I find that you've been sharing a lot more than I've ever seen you share before. Where does that come from? Did that just click? Did you do. Is, is that for marketing? Is that. Because it feels like some of the more authentic things I've read, you know, on, on LinkedIn and very like, I mean, really, I feel them coming from like, real experience, which of course is what my whole, this whole not another CEO is about. So can you talk a little bit about why you start to do that now?

Yeah, I mean, I'm definitely not the one to get, get up on the sort box. It doesn't, I'm not, that's not, not my comfort zone. But I think I've learned a lot during my login and a lot of people have asked me about that, that period. Like, they, they really want to hear it. So I thought, okay, maybe I'll start writing a little bit about it. And as you get more engagement, you, you become more emboldened. And then there's also the other thing. Marketing has changed dramatically. When we started on login, we would buy some AdWords and do some SEO and so on. That stuff is dead. Like, email is dead. And so now we're trying to build a, you know, build up my, my Persona on LinkedIn and it's already paying off. I'm Getting a lot of inbounds from people who read it and, and that's a way to kind of break through the noise.

Yeah. Well, I guess for you, because of what you're doing, your customer, I guess your, your, your, your customer. The, is the early founder. Right. I mean I, I assume the person who's building a company know like how do I do billing and a bunch.

Of other things as well. And I would say, and we talked, there's, there's a little bit about this in our prep call. There are so many, so much content she had on LinkedIn about these high flying comedies. Oh, the top 20 or top 10. This is what they did. Yeah. That doesn't apply to you and me and a bunch hear about some hard problems, some real hard problems. That's what you could, that's what most founders should learn from. They shouldn't look at what Slack did or Zoom did or something like that. You know, most of those companies today has a lot to do with it. They were just there at the right time with the right product and then it just took off and a bunch of people just rode that tailwind.

That's why I love, that's why I love it. And I told you, yes, I did tell you that. That's why I love it because I feel like there's so much of, there's these stories that set the wrong expectations for the next generation of founders and they say, oh, you know, I'm going to go from zero. I had, I'm not making this up. I had someone coming to pitch me something and one of their slides, they have nothing. They don't have a product. They don't have. And they actually, one of the slides said, and we have direct visibility to becoming a DECA coin. I said, you can't put that in your. He's like 24 years old and he was serious, like it was a serious slide. And I said, I said, you can't put that in the, in the deck. I mean I can't even take that, you know, and it, but the problem is, you know, it's like you look at some one company and they've gone from 0 to 100 million in two months. And AI this thing or whatever and everyone reads that and it's like, that's it. No more employees, two people. We're going to get to 100 million in six months. And, and, and so I, I think the, the true stories of what the masses, the real majority of founders go through is important because actually if you hear it, some people May not choose to go. It's not that glamorous. It kind of sucks.

Yeah. No, it's not.

Yeah. So. So one of the things that. I do want to say one thing, because you talked about the ads and stuff. I don't. I want to tell you, I don't know if you remember this, but years ago, when Okta was doing their conference Octane in California in San Francisco, I remember that you bought billboards all surrounding Moscone. One login. Like billboards. It was the best campaign I had ever. You remember this campaign or. No, that was an amazing. That campaign. To your point about marketing and everything. I was like, that was. I remember coming out of Moscone and it was just like a billboard and then another one lost. Like the whole. The whole thing. I don't know. Anyway, I love that. Was that you? Was that you? Or was that a CMO or something that came up with that?

I can't. I can't remember what year that was. I definitely remember the. The event. I'm not sure that was a good investment. But.

But it did. It did. You know, it did stand. It did stand out. I mean, it did stand out.

It was the right venue to do.

It was the right venue to do it. So one of the things is you, clearly you are all about B2B SaaS. I mean, whether building identity and access, management, building billing, all that. What draws you to this problem, to this space?

I just always like solving business problems. You know, I started my first company with a button when I was 17. That was when Denmark, they deregulated radio station licenses. And all of a sudden there were hundreds of radio stations. So I think we talked to some guys that had a local radio station in the city where I was born, and they were like, oh, we track more of these records and we have to report royalties and so on. I was like, oh, we can build that. So we actually built the solution for that and started selling to these radio stations. I think we got less than 10 customers. But no, it was a good experience. And then, you know, I. You know, I never took. In Denmark, you can get like a stipend from the government for five years while you're studying. I never took that. I just. I could make my own money writing software, and it was just a challenge to solve an actual business problem. And I don't really relate so much to other consumers. Plus, it's. It's, you know, consumer is a kind of hit business. You know, it's really difficult to get scale, but you can always kind of squeeze the money out of the business. And so at bigger scale like onelogin, it's really about the teamwork. I'm sure you had the same experience at Better Cloud. There are customers where, you know, a bunch of people from the company have to work together for a long time to win, to get that new client. And kind of their sense of achievement.

And.

Pride from that is something that the team can live on for a long time. And that's what I love about B2B. And plus, you know, many of your customers will come friends like you because you, I mean, you also go through some tricky stuff together and again, that's kind of what creates a bond. So I just love that whole experience and I wouldn't do anything else.

Yeah. You know, for me, I started my career at Vocaloxy, which was a B2B PBX phone system. And then I thought that I wanted to get into consumer apps and because I thought it was steps here, you know. But then you realize exactly what you said. It's, it's like, it's a hip, is. It's kind of like hitting the lottery, right, to build a consumer app. Something that you need millions of people, I mean basically, you know, to, or at least hundreds of thousands to be using it and they're not going to pay. And if they pay, you know, maybe they'll pay you nine bucks a month or whatever. But when you can solve a problem.

For a business, you know what's sexy? Closing a billion, Closing a million dollar contract. That's sexy.

You're right. You're right. It's, it's a really interesting. You know, when you say that also about becoming, I, I feel like, especially for what you're doing now, I don't, I don't know, you know, but I feel this is like billing is something that's a pain in the ass. I have to been through it. I mean it is a pain in the ass, but it is the most important thing to work perfectly because it's the way you collect your money. And so I can imagine that when you, this is an area where you, you actually solve this problem for a founder easily, simply. And that for them is like becomes core infrastructure for. Maybe forever. Yeah. For, for as long as they're running the company.

Yeah. I think if you can get into a company with billing and it just works, then it's really hard to replace you. It's when you screw up. My brother and I used to joke about, you know, you get, people get really upset when they can't sign into the applications, you know, because single sign on is done. But if you mess with the customer for people's money, they get even more upset. If, if it works, then you can, you can have very high renewal rates with. @ onelogin. You know, even though we added more and more components to it, it was kind of a little bit abstract for most people. You know, identity, access, management, what does that mean? But single signer, that's what people could understand. With billing, there's so many things to talk about because it's not just billing, it's about salespeople and customers and renewals and profit margins and, you know, the whole accounting side, there's all the analytics and so on. So there's just so much you. It's. It's a much bigger story. It's much more interesting, I think, to be honest.

What I want to go to the one log in days. How did you get the first customers? I never asked you, like, how did you find those first five customers? Ten customers? Like, did you just. Were they just people you knew or, or cold call? How did you get them?

So the thing about single sign on is they don't integrate to anything. You know, it doesn't do anything. So what we would do is we would get the companies we integrated with to write a blog post about the integration. And this was even before SAML was a thing. And because Most of the SaaS companies at the time didn't support SAML, it was Salesforce and WebEx and the big ones. Because in order to use SAML, you need to have like an identity product from one of the big guys like IBM and Oracle and rsa. And so it didn't apply to startups. So what we did was we built these SAML toolkits in different languages and we started pushing them to different SaaS vendors. And there were a few that picked them up because I had a customer who wanted it, and then we would use that customer to drive more integrations with other companies. And then it just became a snowball and we had customers. I remember at one point we got Pandora in radio as a customer and they said, we're not buying any SaaS apps that don't support SAML. And so because it was such a big brand at the time, SaaS companies were eager to implement SAML so that they could get them as a logo. And so that really worked for us. And so we would kind of use some of our customers to put pressure on the SaaS vendors to get it done.

Interesting. And so you would Go to like who was the first SaaS vendor you integrated with?

Oh, I can't remember. There are some that are not no longer around. I think Zendesk did it pretty early because we knew those guys.

So then they. So you would build the integration, they would build the saml?

Yes, they would implement SAML in the product. We would create a connector in our catalog and of course now everybody who used one login with Zendesk could eliminate all those passwords.

Right. And so then Zendesk would go and push, they would announce it. Yeah, you were using their. Basically their. You were using the SaaS company to reach.

No, we, no, we were using our custom. Well, yeah, we would get reached through the SaaS companies but then we would use our customers to put pressure on SaaS companies who didn't support it yet by saying, well, we're only going to buy your product if you work with OneLogin to implement it. And I think there's probably, I would guess over 10,000 SAML connectors in one login today. Yeah, so I really think we made a huge difference in driving that back then. Obviously Okta helped a lot, but we were the ones who built the toolkits who started pushing it early on because we wanted to democratize it. We wanted to make sure that everybody could benefit from saml, even like a five person shop.

And with Bunny, how have you gotten your first customer? First couple customers, like how have you done that?

So that was mostly just companies we happened to run into. When we kind of thought we had pmf, we went live and some people found us online and we started talk to them and we found, oh, we are still missing a lot of features. And then last year we got a really valuable customer who became, I would say more of a design partner. Even though we've been paying us, but they were running a very interesting business out of Europe and they needed all these features for discounts and parson subscriptions and annual adjustments and all kinds of stuff. So they really battle tested the product and then kind of the word gets out that we started using that as a case study. And again, I think LinkedIn is the best platform for outreach for me to get customers. You know, if I reach out directly to someone who's like founder or cfo, it's not too hard to get a meeting.

Yeah, yeah. It's interesting when you say that about this customer being the design partner. I think back to the early days of all the companies I've been in and those design partners have a huge impact. If you like go rewind all the way back and you're like, wow. The path we took was very much influenced by actually just one or two. We had Netflix in the early days of Better Cloud and I remember the conversations we had with them kind of directed where we went.

But it's really hard to get a design partner because why should this company waste their time on a product that may not work out? I just happened to meet another co founder where we just clicked and he was like, oh, I saw what you guys did at my login and we want to learn from that and so on. And so they, they had experience with two other billing vendors. It was actually a migration project. So they've gone through a lot of billing pain and it just kind of came together in, in a perfect way. And you know, I wish every SaaS or every startup could find a customer like that, but it's really hard.

It is hard, but those people are, they do become kind of your, I mean, some days your friends, you know, like you said, friends, friends for life, you know, especially the ones. What I find, I tell founders is I say you want to find the design partner who wants to be there, like launch this almost as a part time job because they want to see you, they want to be part of your success story and they want to go like, and that's what I tell founders, like, when you find that right, design partner, they're a bigger fan of you than anyone. They're like going and cheering you on and like, you know, and, and, but it is hard to find those. But when you find them, it's magic. I mean, I, you know, I end up staying close with the guys from Netflix, you know, come with Costco, Netflix, I mean all these companies for, for many years. And, and when they would tell you stuff later, well, we got bigger. We raised a lot of money. We had 2,000 customers. And then I would get the email or the text or the chat and they'd be like, Dave, you know, you fucked up this thing, whatever. And I'm like, yep, yep, we did, we did. That's. I need, I needed someone to tell me that.

Yeah, but it's better to have one customer that uses your product every single day, like where a bunch of people use it, than having 50 people who sign in once a week or once a month. It's. And I've talked to other startups that have that where they go, yeah, we have like 30 customers, but no one's like really in the product. And we also, we have also customers who don't use it every single day. But the ones that do use it, that's why we learn so much. But finding it is really, really hard. You have to get lucky.

How do you get that feedback? I know this is very tactical, but how do you go get that feedback from the people like, do you yourself do a standing call every week, every month?

No, no, they just tell us, this is, we need to do this, this is what we want to do. Like, hey, how do we give this discount? Or hey, we want to increase prices by 5% this year and we need to do it now. And hey, can we see our users revenue on top of the monthly recurring revenue? I mean, so they were just pushing us, we need all these things. And so we were just, we had like six months where we just cranking our features really, really fast. And we've gotten to, we got to a point where, okay, now we have to slow down a little bit so we can ensure code calling everything. So we definitely have done that. But there was like six really intense, intense months to catch up to what they needed to run their business.

Wow, wow, wow. Let me, let me ask you a question, which I ask every guest, which is what is the biggest challenge you've ever faced at any of your companies and how did you overcome that?

Yeah, so one concern that people always had with one login was, you know, we kind of holding the keys to the kingdom. So if, you know, because people sign into one login and then they sign into the apps from there. And the concern was if one login gets breached, you know, kind of like the world's your oyster for the, for the hackers at least. And so one day during a board meeting, I got a slack message from my brother saying, you know, I think we have a security issue. And so for about an hour I was getting live updates and it turned out to be really serious. And so that was like what I feared the most. And I, it was, it was a really staring moment. And once we kind of understood the situation on that first day, we knew that we had to go out immediately and announce it to our customers. I wrote a blog post about this about maybe a month ago. So I immediately got. Once we kind of understood the scope of it, of course we didn't, we didn't know how much data was taken, but some data was taken. I called our 10, 15 biggest customers directly and said, hey, there's going to be some news about this very soon, so we just want to give you a heads up. And we on it. And One of the CIOs said, oh, no one's ever done that before. And we were also about to close our single biggest deal with Airbus. And it was like a million dollar deal. So I was like, oh man, everything's just gonna fall apart. And so the next day we, we went live with it and we immediately, you know, got bombarded with the phone calls. So for the next many months, you know, it was about, we got drilled about what happened. And here's the thing, when you get interviewed by security teams, you know, you can't lie to them like they will, they will sniff it out if you're giving them some kind of story. And so we just said, well, here's what happened and here's what we're going to do. Give us a few days, we're going to come up with a plan. And so for I think probably the next five, six months, we had follow up calls with a bunch of customers about where we were in that process of fixing all these things. And some of the things took a long time to solve because of our kind of architectural, but because we, we were so transparent about it, we actually lost very few customers in the process. We returned more employees, I would say, than we lost customers because it was very stressful for the employees. But that was really scary. I mean, it could have completely entered the company and it didn't, which obviously was a huge relief. But we could have gone about it differently and then it would have been over.

Wow. I mean, I remember it, I remember, and I remember it being a big deal for everyone in the space and everyone got real nervous about their own. Yeah. Systems and platforms and, you know, and so from, from that moment in the board meeting when you found out till you kind of closed everything, you know, how was that a year that it took to kind of do all that? Six months? Like how long was that open for?

I guess, you know, I mean, I think since we have a subscription business, it's going to take a couple of years before, you know, the full impact, but. And we definitely had some customers that deflected, but it wasn't like it was not even 5%, it was a very few. We did the best we could. And again, it's about transparency. That's the other thing with B2B. Once the trust is gone, your customer is gone as well.

I think the lesson of transparency, I want to, I'm going to double down on this. I actually don't think I've had this conversation with a founder or with a CEO yet on the podcast. And I think many People face this situ. Not this situation, but a situation like this. And I found, let me say for myself, in the beginning part of my career, when we had issues with our systems at local ocd, I would not want to write anything to the customers. I didn't want, I didn't want to put it out there so much. If I put it out there, the competitors are going to get it and then they're going to say this thing and then this. And then every time I didn't put it out, it ended up in 10x worse, worse. And then when we got to Better Cloud, I told the person who's in charge of support, if we have the littlest incident, I want to tell everyone, you know, that we're having a challenge and this is a thing and I want a page for status. And like, what you want to. This is going to cause more tickets. I said, I don't want the customer to tell me that they're having the problem when we already know and we look stupid, you know, and. But you do feel this thing of you don't want, you don't want to say that you messed. I mean, it makes sense, you know, you care about the customer, you care about the brand, you care. But, but you learn almost every time, right? I mean, Octa's had the incidents and they've not said anything for however many weeks and whatever it's been, and then they come out, right, for a month, like. And I think that it's, it's. I mean, I understand the psychology because I've been through it, but I think the lesson for people, for founders, is like, to the customer, trust is everything. And they may be, they will be pissed off. Not maybe they will be pissed off, but at least they know that you're telling, you know, like, they feel like you're going to be open with them, you're going to tell them when things happen. And what I find is most people don't really want to move off of the platform if the platform works.

Yeah, it's.

You had an incident, so does everyone else. So did Microsoft, so did Google, so does Salesforce. Like, you're gonna have, you know, it, it's, it's. I think that's a really important lesson.

Yeah. And we were one of the first to have a big incident. And then afterwards, you know, late on, a bunch of other companies have breaches and not everybody dealt with it with the same, you know, transparency. That, that was very clear. And I would also say sometimes I run into people here that I've into Conspiracy theories. Once you've had a security breach, I mean you have to, it's. You can, you cannot keep something like that a secret. Like if sooner or later it gets out, it just does disgruntlingly. I mean something, I mean it just gonna happen. So you just really, you might as well just tell it right away because it is gonna get out. And we were like Octa was really competitive. They had a bunch of our competitors on speed dial. If we had some kind of like outage thing, you know, hey, do you want to speak to, to Octa now? They, they were all over them. So going out with this Gert Bees, I mean it was, it was pretty scary.

All right, let's. I want to transition a little bit more to your background in a second. But I want to just ask you, you know, you fast forward three years from today. What is Bunny look like three years from today?

Yeah, very profitable. And we probably will have an office somewhere probably in Los Angeles. There's a. Right now we're doing billing quoting revenue recognition, SaaS metrics and self service and tenant provisioning. So it's kind of a mouthful, but there's so many things we can lay on top of it. Like US sales tax is really complicated and you know, if you want to buy that from stripe, that's half a percent of your revenue. And there is the contract language management which is like, like a kind of very related to the whole coding part. And sales commissions are tightly tied to what you're doing on the with the revenue. Like we know we have the system of record for the subscription revenue, so there's so many things we could we can add on top of it. Are we going to take our time? We want to make sure that obviously everything we're doing now works perfectly before we vent. But there's a lot of places we can go and that's really exciting.

When you are the revenue, when you're the system of record, you do think about all these other point solutions where people have built pretty big SaaS companies. For each of those point solutions, just think about commission.

Like huge companies came out of that.

Yeah.

And that's something that's super complicated to deal with because you know, you've dealt with compliance and so on. The sky's the limit when it comes to the imagination. So let's see about that one. But I think being the system of record gives you so many options because 10 years ago people would do a best of breed. Like you start with CRM, maybe you'll get some billing in Our CPQ and I would squeeze that in bunch of integration and it just. You keep patching and patching and there's. The data is just in all these different silos. We've even had customers say, well, we would still like to invoice out of QuickBooks. Why on earth would you want to do that? Now you're going to start messing with the invoices in QuickBooks and now you're messing up the revenue recognition. Like you, you want to stay within this box for the revenue. You can get read only feeds, but this is where you manage it all because it's going to make your life a lot easier. So I'm super excited about that. And customers are kind of quickly coming on board when they understand what the guardrails will actually do for them.

I like that. I like that. All right. I want to transition a little bit more to your background. You talked about it before a little bit from Denmark, obviously with your brother, started these two companies. But was it like. And you had your first company when you were even younger, 17? Did you just grow up in an entrepreneurial family? Was it like, was that where this comes from? Was something. Did something happen in your childhood that kind of got you down this path? Like, where, where does this come from?

So my dad, he, he had his own business. It was just him and one other person and he was a screen printer, so, you know, printing stickers and so on. On a sales screen. And it was up and down with that business. We had a comfortable night. We're not reach anything, but we had, you know, everything we needed. But there was one point where that was during the financial crisis in the, I think 80s, and we were. My parents were about to lose, or close to losing their house. I remember one time my mom had to borrow money from me for food because I was making money writing software. And it was kind of weird. It was only maybe like few hundred bucks, but still. And I was a teenager and I remember that the letters from the IRS came in and they were just piling up and my dad wouldn't open them. And I was like, why not? Opening the letters app, that's just bad news. I'd rather not deal with it. So I was like, I'm never going to start a company myself. And then when I was 17, I started. And then once I got my first computer, I just knew this is what I want to do for the rest of my life. So that changed quickly. And then I think what's so amazing about coding is you can build anything out of Nothing, no raw materials. It's like writing a book. It's only your imagination that is the limit. You can build anything. And that is just so amazing.

Did you go to school, like computer science major or something?

Yeah, I did start a computer science at the University of Copenhagen. But after six months I started working full time because I'd read a bunch of the books already. And so I continued that for almost two years. I started working for this Danish software company and one of the founders, he would drive into the university and drop off my assignments so I could work more. And so after two years of that, I was like, oh, yeah, this is not. I don't need that. So then I, then I dropped out.

What is in, in Denmark? Like, is it in the culture? Like, is. Is entrepreneurship big? Is it, you know, is it. Is it a big part? Or, or is it. I don't know, you know, the.

Culturally, how that is not really. It's. It's a small country, you know, pay a lot of taxes. That's only. So I live in California now. There's only one, one place where you pay more capital, capital gains tax, and that's a Denmark. So I really optimize that move. So I would say there's less incentive of people to start to be entrepreneurs. But I think it's changed a lot over the past 10 years with successes like Zendesk and, you know, Basecamp. So there are hundreds of startups in Denmark now. But obviously the reward is bigger in the US because we have such a big country to sell it into. And also, and this is the biggest difference, American companies is more willing to give you a shot even with one login. You know, it's so hard to get Danish customers. Even though I was Danish, everybody was like, yeah, we normally buy Microsoft. I think really that's. It was such a thing. Whereas in the US everybody, you know, people are like, dream of making it big, right? So when they see an entrepreneur, they can kind of like, yeah, I want to give the guy a shot or that woman a shot. And that's the biggest difference between the US and Europe.

Did you, speaking of this, I mean, did you have a mentor growing up that as you were starting these companies that you worked with that officially, not officially, you know, formally, you know, do you have that?

I wouldn't say I had a mentor, but this company I joined just before I turned 20. This was back in the Franz Minitel days when they had these little like 40 character terminals and you would dial up with a modem and so on. So they build software for that. And I worked there for almost 14 years. But at some point we had built a solution for an Internet service provider when that started becoming a thing. And then Cisco System saw it and they put in an investment and all of a sudden we were venture backed and we grew from 15 people to 400 in like very few years. And we're about to go ready, go, go public on the NASDAQ. But then 911 happened@the.com bus. So that company grew very fast and did had international expansion and I became, I would say close with the, with the two founders. They made me and one other guy a partner in the company when that started happening because we wanted to make sure that like we were the kind of the technical backbone of the company. And I was, you know, they took me to investor meetings and I was participating, hiring, hiring people internationally and you know, going to the U.S. i've been to the U.S. 50 times before I moved here on business. So I kind of like seen a lot of these scaling steps before. And I think that makes it a lot easier when you're doing it as well because you kind of, I mean it wasn't my responsibility, but I was observing on the sideline and sometimes in the middle of it for many years, so it seemed less daunting, oh, you need to open an office in the US or VP of sales. I met those people before so it wasn't so daunting.

Someone said that to me in one of these interviews. They said, you know Tony Safoyan from Sada, he was the founder of Sada System, Google Partners. Anyway, he was telling me how he's like, for him it was as soon as he could see a person who had done it before, he then knew it was possible. And it was just one person, just seeing one person do it that was close enough to him that he had that, you know, then he's like, oh, I, I can do this. You know, this is what it looks like. And you're saying even deeper than that, right? Because you're, you're kind of riding shotgun with them through that, through that journey. Yeah.

And I know it's really interesting you say that because knowing what good looks like makes such, makes such a difference. So we were selling to phone companies like ISPs. So it was like, you know, Delacom and Belgium and you know, we sold to China and Thailand and so on. And we had like big RFPs, like 50100 page RFPs with hundreds of requirements, long implement implementation cycles. And so it was really Enterprising multimillion dollar deals. And so we kind of been, been through that. You know, it's like, yeah, the, the complexity is not really scary. And I, I've seen several people like, lead different roles and okay, this person was definitely better than the one we had before. Right. So now I know what good looks like and that, that makes a huge difference.

What is it that drives you and motivates you deep down? You know, what, what is the. Where does it, where does that come from, that drive?

I grew up with the Legos, you know, one of the few Danish international known Danish products. And we would build everything out of Legos every month. There was a new theme like power chips, trains, you know, tanks, you know, boats, and you name it. And so with Lego again, you can build anything you want. So I guess I just always had like the, the urge to build. And I would say back to what I mentioned before, when I wanted to be a chef originally when I was up Till I was 13, but then I got my first computer and when I put my hands on that keyboard, that kind of tactile feeling of typing, I just knew this. I love this. And then I would say, maybe a year after I got it, I started programming. And then I just never stopped.

Okay, last question for you. Knowing everything you know today, all the experiences you've had, you can go all the way back to the beginning of your career before you started your first job. And give yourself one piece of advice. What would that be?

Yeah, you touched on a little bit before about mentors. I would say we, you know, we all have our strengths and weaknesses and, you know, the seven deadly sins, mine is definitely the pride. I'm not very good at asking for help. And so sometimes when I probably should have asked for help or there's someone that could have taught me how to do something or give me feedback, I could have benefited from it greatly. But it's not really in my DNA or my upbringing to, you know, I'm going to like, power through this and figure a way myself. And I know other founders who have been very good at surrounding themselves with advisors and mentors, but which. Not everyone is the same. But that's probably one thing I could have done. I could have saved some trouble there. Did you have mentors?

I did, I did. You know, I had. Yeah. Well, really for me, it was my father for most of my kind of upbringing and even my first job. And just he had small businesses himself and he would give me advice and everything. And then at Vocalocity, a guy Came in as an independent board member. His name is John Hallett and he had run a couple of his own businesses, started a company and he became our independent. And it was really, at that moment he really kind of leveled me up as it related to being in a venture backed company and how to go to board meetings and how to present and how to build a team and how to DO metrics and KPIs and. And then he was actually the CEO of Cloud Sherpas and he recruited me to Cloud Sherpas and then he was the exec chairman of Better Cloud. And so kind of through all those steps he was, you know, he had seen a lot himself as an operator, but then also as an investor and as a board member. And you know, I think to your point, it's the thing about asking, I don't think I'm very good at asking for the help. But after a while when I started getting the help and it was that he would give me advice and I was like, I know how to do it. I'll, you know, and then he would give me the advice and I'm like, okay, I'm going to try it. And then it would work. And it would work the second time and the third time and by the fourth time I'm like, I'm just going to call John like, you know, and ask. And so you know, that to be honest, that's what I've tried to model myself after the businesses that I work with today and that I advise and it's. How do you shorten the learning curve? How do you just help someone avoid that big? I mean you've now been through it so you, you kind of have all those scars. But I think sometimes you don't need the scars. Yes. I mean of course when you have your own scars and the pain, it's going to be more acute. But, but that I think there is an opportunity to shorten that and to remove some of those.

It'd be nice to have hero scars. I wouldn't mind that. But you know, but I think a little bit with it with a, with a real mentor, like a long term mentor, just like a design partner, they kind of have to pick you then you picking them. Because it's a lot about chemistry, like you're not willing to take advice from everybody. You know, you have to be a certain understanding. Yeah. And then I think we also, there's a lot of mentors that don't know their mentors but they're just people watching, observing them, like, oh, you're doing it this way or this is how you're handling that situation. So they're learning from it that way, but actually having like regular meetings and talking face. I never had that type of mentor.

Yeah, no, that's good advice. Actually. No one has said that. I think that's good advice of asking for help, so. Well, Tom, thank you. This was amazing. I'm really happy that you did this with me and you agreed to do this with me, and there's a lot of real talk in this conversation that I think people will will learn from. So thank you.

Yeah, that was fun. I was looking forward to it. And good to see you again.

Awesome. Awesome. Well, for everyone listening, I hope you enjoyed. I hope you learned something. If you did, please share this with your networks and we'll see you for the next episode of Not Another CEO Podcast. That's a wrap for this week's episode of Not Another CEO Podcast. Thanks for joining, thanks for show notes and more. Please Visit not another CEOPodcast.com we'll see you next week.