Todd McKinnon CEO of Okta: Top 10 Learnings Building a High Performance Organization (Updated)

Thank you for joining us at SaaS to Scale. I am very excited to have a CEO that I haven't gotten to know yet, but I have really looked up to from afar, which is Todd McKinnon from Okta. So many interesting things about the company to me. The identity space and the login space are always interesting. Goodness, why is it so hard to deal with logins and passwords and identity after all these years? So I've always had a personal interest for a while. And it's also a very interesting space that in some ways might have seemed niche and today is a $30 billion security and identity leader. So super excited to have you here, Todd. Thank you for joining everyone here at SaaSr.

Yeah, it's great to be here. I've been looking forward to this for a long time.

So we'll talk on the next slide about building a category. Broadly speaking, identity is not a new category. Like Microsoft owned a big piece of this, but what was the big bet But what was the big bet that Okta rode to its current $30 billion heights?

The, when I talk about this one, it's obvious, but it's one of those obvious principles that is so obvious that sometimes it gets missed and it bears restating, which is you can't, if you're going to be successful in a new market, you like for right now, you couldn't start an online bookstore, right?

Yes.

You have to do something that's novel and something that's directionally correct with where the trends are going that give you an advantage. And that's the easy part. The hard part is that the reason that things are unknown and the bets are not certain is because no one knows them. So in the early days, like the high order bit by far is making sure that you're, you pick the right market or you pick the right differentiation within that market. It can make you successful more than anything. It can make you fail more than anything. It's not the only determinant of your success, but it's by far the higher order bet. And for us, it was the, it was basically that the identity problem, the multiple logins, the security, the authentication has existed since the first computer. The, and different generations of technology had different versions of identity. The bet for us was that there's really two parts of it, kind of. One was that it would be a big enough problem in the future to build a large independent company. Because previous generation, a lot of the vendors were niche or they got picked up by bigger companies and never were independent and surviving the test of time. And then the second thing was that there would be so much cloud in the world and that there would be a cloud alternative for everything. It would actually make sense to have your security and your login and your identity be in the cloud, which back in 2009 was not obvious. It was—

that's true. That was seen as crazy, right? I, that's the one I can't trust my credentials in the cloud.

Exactly. Yeah. I thought the cloud is like my salespeople are doing something some of it out and they got some content and maybe an HR system, but not my, I'd never do my infrastructure. I have a data center person where we have our servers and whatnot. That's, I don't know about that cloud stuff.

As an outsider, it seemed like Okta, I'm sure it didn't feel that way to you, but it seemed like Okta broke out relatively early, but there were competitors that Okta pulled away from. And it was interesting, you chatted about how being truly enterprise, being staying up, right? Uptime and security were critical. Were actually more critical than features for you pulling away?

We, I think the first thing was that it, the product was so differentiated in terms of most of the products in identity and meaning that it was a cloud service. You could, you didn't have to install software and you didn't have to, and especially for this market, by that time, 2010, the SaaS business application or SaaS email was, um, you know, people were starting to accept that and it wasn't that revolutionary. But the people that were dealing with identity technologies, they're installing Microsoft Active Directory or they're doing Computer Associates Identity. The fact that we had a really pre-integrated, out-of-the-box, nice-looking UI that was up and running and connected to their systems in minutes was just shocking, right? So that was really differentiated us from all the legacy identity suites that were dominating the landscape at the time. And, and then against the smaller competitors that were maybe a couple years before us or about the same time as we were, we really did, we focused on a couple, one thing is we just made sure that the service was going to be reliable and scalable. And then we also spent a bunch of, we, I remember we spent 7 or 8 months just engineering the fact that we didn't have to take it down for maintenance. And before, I came from Salesforce and we had to take the service down for 4 hours every 3 months for maintenance to upgrade it.

Yes.

And that was the way, the way things were done. But with Okta, it was your front door. You couldn't take it down. So we had to spend 8 months in a competitive market where we weren't shipping any features because we had, we knew that we had to be able to not take it down when we upgraded it.

That is, as founders forever, but certainly maybe up until $20, $30 million, that's one of the most stressful things is that effort to refactor or to invest in infrastructure when you're feature poor. It's so stressful, isn't it?

Yeah.

Did you have to put your fist down as CEO?

I, so I think that I don't remember it as being that controversial internally. I think just because it was obvious, it's okay. All right guys, what are we going to, what are they going to say when we tell them to take the service down for 4 hours? They're going to be like, no. So it was, that one was uncontroversial. But I do think a lot of people, I think a lot of people over, we're talking about how this worked out well for us, but I think a lot of early companies do too much refactoring and too much perfecting of the architecture. Being successful in the marketplace and getting momentum with customers can make up for a lot of sins and give you a lot of time and effort and flexibility to refactor. All the amazing big companies like Facebook and Google and these companies all refactored 3 times.

They do, but I wonder, and you were pretty senior in engineering at Salesforce, right? You were VP level. You were one of the leaders.

No, I was running engineering. Yeah.

All of engineering. Yeah. I should have. To me, it's harder in SaaS and cloud a lot of times. In B2C, it's complicated, but it's more modularized. You can take pieces out. I, I go on LinkedIn every day and my, my post feed breaks for an hour or two, but no one really knows what— Okta can't ever go down, can it? It is so meta. It can't ever go down.

I'm not saying you can— I'm not saying once you make it, you can refactor it and bring it all down. I'm just saying you, you get some more breathing room to do it behind the scenes.

It's a question I'd ask for advice for founders, even for me, 'cause I still find the topic stressful and cathartic, is how much— on the one hand, you had to take these 8 months out, right? To make up for your technical debt. And we all have technical debt. On the other hand, you were going very enterprise in many ways, right? You were doing that so you could be the enterprise winner and own reliability. And so how much of a hack can we live with? How long can we be, because you probably have had the opportunity to think about this more than anyone. How much on a scale of 1 to 10 of the hacky scale, how much was Okta hacked before you spent 8 months building that reliability?

I can't say Okta and hacked in the same sentence. It's against my legal school. No, it's not. It's too scary. It's, we still have debt today, so it's, I don't mean to, you know, imply that we have, we've perfected this by any degree, but I think it really matters. I think you have to be honest with yourself about when you do take out time from delivering directly visible customer features to, for, to work on refactoring or architecture, you have to make sure that it's not, it's going to have real benefit, right? Like it's like the benefit of not taking it down for maintenance. We could say it in one sentence clearly. The, the benefit of going to the new JavaScript framework. Sure. Because it's the cool new thing.

Yes.

That may be dubious. So I would just say, just have a real honest conversation about what the benefits are.

And so how early was that? Was that in year 2 or when did you do that 8-month project to, to have no downtime?

Year 1. Yeah.

Year 1. Year 1. And so you mentioned before, you didn't feel like you were super early to the space. You felt like you were relatively early, but that would let you jump ahead in terms of the enterprise to making that enterprise bet.

Yeah, that's right. I think that the, we did a better job on reliability and the robustness on, against some of the competitors that were starting in the cloud and at our same size and stage. And then the other thing that helped us was, and I think it's probably go-to-market is there's lots of theories about the best way to go to, you know, best go-to-market strategy and so forth. The one thing I've learned is that there, it's dangerous to generalize and it's very custom, very market specific. There's good principles that apply on different kinds of go-to-market, but the right go-to-market for you is pretty, it's pretty market dependent. And for us, the fact that we were doing this security in the cloud, this thing that was highly, at least in the early days, was going to be, it was going to be very reference-based, the selling, the people that trusted other people that used it. So we really went hard in on direct sales. and we raised a lot of money and we hired salespeople. The first 50 customers, the first 100 customers, I probably at some level personally sold a lot of them, right? Got it. Trust me, I could build this. It's going to work. You're not going to look foolish when you're the only one doing this. And that helped us get it going.

Definitely the classic enterprise playbook. Bring in the CEO, leverage her, his background, sell high and sell on trust. We will deliver this for you. Did you have, and I want to, cause you talked about trends that you bet on and let's talk about cloud versus mobile versus developers. That was a fun conversation. But when we talk about those early days, how, for the long tail, how many apps did Okta have to have on the login side? Even back then, the average enterprise probably had 100 apps, including some that you barely touched, right?

Yeah. I remember the first, when we first, we got, I think we did something smart as well, which is we talked to customers very early. It was customer development from the very early days. Yeah. And we got the product out there and sold and being used very early. I remember the first customer we had was, there were two apps. There was Salesforce and Google.

Still around today.

Exactly. We, we connect, we had, instead of two logins, you had one login to two. It was great. And, but it was in the strategy for figuring out which, we built a nice extensible platform so we could connect to other applications easily. But the strategy was basically the first 10 customers, we asked them, what did they have?

Yeah.

And we integrated those and then we kept going and kept going. And pretty soon we got the, the kind of the fat into the distribution where it was the common ones. And then for a long time it was, it, it took a while to start to work down the long tail. But that's when the, the benefit of this became really clear when you could go into an, uh, a company and you could cover 90% of the apps they have. Right.

Got it.

So I would say that the, the fat part of the tail, the com— very common apps everyone has. Got us started, but I would say within a couple years we built out our catalog so that you could get enough down the long tail with, with some customization tools to get to everything that you could deliver the value proposition of, hey, we can cover everything. Because customers do want everything covered.

They do. So in the early days when you came in, you had Salesforce and Google. Those make sense. But when someone had a Microsoft Dynamics instance or an SAP instance, or instead of Workday, they had another application, how did you handle that when you were meeting with a big account? Did you just quietly go off and build it and wave your hands, or did you convince them to to have 80% of their apps in the federation, or how'd you handle that scenario? Because it happens to a lot of us. Yeah.

In the early— so the other thing in the early, especially in the early days, it was, there would be a use case, right? We, for example, we got really good at delivering the value proposition of, hey, you're going to use Box. We'll connect Box to your on-premise directory. So it won't even be multiple apps. It'll just be, you can use your Windows network password to log into Box, which is much easier.

For the users.

So it's like coming at a slice of it. And then maybe they would add, hey, you're also using these other, the email app and the, and Salesforce Automation, so you can add those and it would extend over time. But I think that the other key thing here too is that we, some of the vendors in the space were, were very protocol specific. They're like, oh yeah, everyone's going to work on our protocol and then someone's going to do the work back to us. We weren't like that. We were like, we're going to do the work. What do you have? Okay, 10, we can do that. Make it work. And then what happened over time is that we got enough customers that then people would come to us and use our APIs to integrate to our platform, which is— so I think the lesson there is, I think Paul Graham talks about doing things that aren't scalable. Don't try to make it too perfect in the beginning. You got to do things that aren't scalable, like just scrappy and get it done and then let the momentum build around you.

But so you had the API and then, but you did more of that unscaled work for longer. You built more of the integrations yourself.

Oh yeah. Yeah.

Because a lot of us hope that this API we build in year 1, that developers will glom onto it and it's great, but it's a good, it's a good lesson. You may have to carry that a lot longer than you think, right?

Yeah. And it's, it all, I think we have another, there's another lesson about, it's in the slides, it's about listening to the customer. And I just, you have to, it's a delicate balance between literally doing what the customer says and then combining that with your own vision of what's right for the company. But I think a lot of times companies make the mistake of not listening to the customer enough. And our customers were telling us they want a bunch of apps. They don't want protocols.

And I want to come to that customer point, but let's hit one thing because it was so interesting in the earliest days about which bets you have to get right. And so that we talked about 3 bets that Okta is still working on today. There's cloud. Which was, ended up being an A+ with an important note that going enterprise was the winning strategy here. It's not always, it's not in every category, but it really worked. There was mobile that you felt you were late to, but survived, right? And then there's developer, which you took a while to invest as heavily as you did in cloud. So what did you learn about where to place your bets?

The, I think the big thing is that, I guess it can be comforting or it can be disconcerting depending on how you look at it, which is The, if you don't, if you don't get, if you don't get one A+, if you don't get one big bet, you're probably going to struggle. So that could be comforting because you'll have to get one right, or it could be stressful because you're not sure. And then beyond that, I think you can, you do have, you don't have to get everything perfect, right? These companies that are successful aren't, you're not like 19 for 19 on all the bets. So I think for us, as you said, we started in 2009 and, and started going to market and right after the iPad and the iPhone were really rampant. And we were, our story on mobile wasn't good for a number of years. And we had to try a couple of times and we had architectural changes we made to make it work. We did a lot of foray into managing mobile devices, which didn't work out. It turns out that what people really want on mobile is, it's simple in retrospect, but they just want login and security to work natively and seamlessly. And I think we were a little late and then we tried to go too broad on it and try to do too much with the device instead of sticking to our core and make it just amazing on that platform.

But it didn't kill you, right? You had the brand, you had the winner, and so you can't be an A+ in everything. Customers are willing to work with you until mobile caught up with the cloud part of the portfolio.

Yeah, I saw other companies too, right? Facebook was, they had a foreign mobile that wasn't great in there. If you look at their S-1, it was Mobile was like a risk factor. And then 3 or 4 years later, it was mobile. It could disrupt their web business. And 4 or 5 years later, it was like the main, all the revenue almost.

I'm still waiting for the Instagram to really work on my iPad. If you have any connections over there, let them know. It's true. And then developer was interesting because developer in some ways is a different sale as we talked about before. You were so enterprise and so IT focused that maybe developers were not as big a focus in the early days.

Yeah, we, so our, I mentioned earlier that the two parts of our business, we have employee identity and customer identity. The customer identity for us really came out of, talk about listening to the customers. Customers kept wanting to use Okta where we'd sell it to them for their employees and they would want to use it for their customers or people outside of their employee base partners or a common thing was like insurance brokers, the thing you would think of like external people, not employees. And they'd be using the application for this. We had a, I remember we had a big pharma company that wanted to use it for hundreds of thousands of doctors to log in and get prescription information. And we were like, listen to this for a while. We're like, do you really want to do that? And we finally realized that it was going to be a big part of our business. And I think the mistake was, is that to your point, we didn't shift early enough to knowing that this, some of the buyers in this new market were going to be overlapping, but there were new influencers and new buyers, whether it was the product person, whether it was the developers that were thinking about building out these new solutions that were going to be customer facing. And getting our product that was getting our product A+ to work perfectly for the developer was something if I had to do the last 10 years over again, I would have done much sooner.

Yeah. Was it as simple as putting a small team on it earlier or what would have been the best accelerant there?

Ironically, I think that it's the opposite of that. It's, it's much deeper than just having APIs or just having a good website. It's because the thing about developers is they're smart, right? Once they get past the website and the API, they realize the core of the architecture, how it's built.

Yeah.

So I think that's one of the reasons why it, it, it, if it was just the team or a website, maybe it wouldn't be that much of a problem because you could do it quickly, but it, it takes a long time, which is why being late slows you down.

And just one small nerdy question. I know I'm talking to a, a, a great engineer, but what, when you had to add the customer piece, a lot of orgs, it's very complicated to re-architect like Slack and others when you hadn't planned to have a multi-org application, right? When everything was supposed to be inside of one company, it's often complicated to share data across companies. Was that a huge project?

I think we had an advantage where some, we got fortunate on some of the internal architectures. So a customer could pretty easily have separate instances of Okta.

Got it.

And that helped us a lot because it is as much as it is, as much as the benefit of having one platform that does both in terms of knowing how to administer it, that's going to scale and so forth. They do want it segmented. So it was pretty easy for us to split that apart in our backend.

And let's take, now let's take a couple minutes. You had, your lesson was on creating a category, but you had a very interesting version of that in terms of the issues. And in which is that the customers got Okta identity security login. These were issues since the mainframe, probably. I've never used a mainframe, but for sure since logging into computers in college, so the customers got it.

Punch card.

That's a punch card. You just slide that one in. I actually had a summer job where I had to type punch card data into a database. Database manually. There was no way to do it. But yeah, that was—

I'm the— my age is that I ever used punch cards for was a scrap paper in second grade.

Scrap paper.

There's a little bit of—

they were cool though. So your customers got it, but this is a problem that some of us struggle with, although it's the opposite when we think about creating category cases, which is getting employees and investors excited. Today it's easy. Today, literally, you can show someone a computer and have them use Okta to log in and like, okay, I want to work there. I get it.

I can—

this is a safe way for me to log in. But in the early days, this is too small. This isn't— how do I compete with Facebook? So talk a little bit about how you convinced employees and investors to join this niche, unexciting space in the beginning.

Oh man, it's— I still get pissed off when I, when you say that, like just there's that reaction from those days.

It does. It drives you crazy. You have a visceral reaction. It's not true, right?

It's too big. It's huge.

It's gonna be worth billions, guys. Trust me, it'll be worth billions.

Yeah. When I, it's the customers knew, like the customers knew, right? Like you would go to a customer and it was never, customer's like, oh my God, yes, please solve this. Can you solve it? This would be awesome. This is going to be the best company ever. But at the time there was local was really hot and mobile was really hot. And there were all these companies that, yeah, I forgot when that was hot.

Yeah, that was hot.

Yeah. We're taking off. And so for investors and luckily we did get great investors, but a lot of the investors we talked to were. There's never been an independent identity company. The best case outcome here is it'll get bought by CA for a small amount of money and it's not a big enough problem and employees couldn't get excited. And the learning for me was that if you stick with your vision and you power through that, it's, it feels really bad in the moment, but it's good because once it flips and once you prove that it is big enough, you by de facto own the category. Right? You're the person now, and now all of a sudden you're, you go from this person that was pushing the rock up the hill to being this person that, or this company that is really setting the agenda, which as painful as going through the process is, you almost want to seek that out because that means that if you get through it, you have this really powerful position of defining the category and saying, obviously since there never was a company before. That did this at scale, and now we're doing this at scale. By definition, you should listen to us on what's gonna happen next, and you should buy our products and you should come work for us. And the contrast between the two states was, was pretty poignant in my mind.

Defining category turns out to be a moat if you execute it perfectly.

For sure.

It's like a super brand. Not only do you have a brand in the space, but you own that space. So it's a double moat, right? You get—

The ironic thing is that when you're going through the tough parts of that process, yeah. The natural reaction is to try to, if that's a word, undifferentiate yourself by shifting into something else that someone else owns. Oh, we're really like, yeah, exactly. We're really, we're not identity. We're collaboration. A lot of people know about that and that kind of kills the benefit of it.

And when, I know I find there's specific moments in terms of ARR, but you may forget, but when did you feel it as a founder, as a CEO? When did you feel that line had been crossed where you had that moat, you were that category leader? When and what? Because we all wait. It always seems to take too long. Yeah.

Yeah, for sure. I think it was, we were probably like 50-ish era. 50.

So that's pretty late in some ways.

40, maybe, maybe a little later, maybe 30. And at the same time, what really happened was Microsoft announced a competitive product. Then, yeah, no, seriously, it scared the shit out of me. But, but once I calmed down, I was like, wait a minute. First of all, they're telling everyone in the world to move to the cloud with Office 365. So that's gotta be good. And we were seeing that in the customer base that was like, tons of demand because email's in the cloud now. Of course we need identity. And then the second thing was that this company— companies want to see a choice. They don't want to just— they want to look on a sheet and see, okay, there's two choices here. Which one am I going to pick? So it validated the category to that degree as well. But those are the next— the years after that were a lot different, a lot bigger, faster, stronger.

Just one niche question because it happens to us when you, when you opened up the— your Google and saw that Microsoft was competing, how long does it take you to get over it? A day, a week? How do you communicate that to the company other than that it doesn't matter? Like, how long does it take you to realize they usually can't kill you, right? 95 times out of 100.

I think you, I think it really takes a year, like a year in the market to convince yourself that it's not going to happen. But I think that psychologically, or intellectually, you can get there pretty quickly. Even psychologically, I think you can tell yourself the odds are pretty low. But I think it took a year of us seeing the behavior in the market and how the customers reacted to really know that it was going to be an advantage.

And you obviously saw some of this on the other side at Salesforce. How can you tell? I've learned certain tells, but how can you tell if someone like Microsoft, whether it's a high enough priority, are they going to go the distance? Like it's one thing to launch a product because if you're Microsoft, you have 100 great engineers just extra, right? But will you go years 2, 3, and 4 without revenue? Will you build Chatter into a Slack competitor? How did, were, are there tells that you saw that, that maybe it would, that wouldn't be their top priority?

There, there are. Yeah. I think they're different for different companies. Like Salesforce launched a competing product too.

Yes. Um, was that scary too, having worked there, or was it less scary?

That it was less scary just because they didn't have control of email. Uh, uh, email is a really strong, a really important app for employee identity. And this was when the company was 100% employee identity. Now it's about 25% customer identity. So, Anyway, so Salesforce was less scary just because of that. But I remember that they, when they announced it, they, it was not even part of Dreamforce. They was like, they leaked it before Dreamforce, like as a pre-leak. And once I, once they did that, I knew they weren't serious about it.

Oh, I might've guessed it was the opposite. It's we're going to, we're going to promote it twice. We're going to leak it and then we're going to promote it twice.

No, and then it didn't show up at Dreamforce.

Oh, it did show, then you knew.

And with Microsoft, what the tell was. When they're, what the features they were delivering were, you could tell that they weren't doing things for identity. They were doing things for Office 365. So they were doing things to make it—

I see, too focused on them as their own vendor, right?

Yeah, exactly. Yeah. They weren't, you can tell they weren't going after the customer requirement. They were going after the, which I understand why Microsoft would do this too. They were making sure that the $20 billion communication collaboration business thrived.

And that, that was, I think, well, that's where you can almost always win, right? If the big guy is focused on a single cloud or a single app and you're going multi-cloud, multi-app, it's impossible. They're never going to have the investment that Salesforce or Microsoft did, someone that's going to serve hundreds of vendors, right? They'll never have it. Will they?

Yeah, it's just a, it looks on the surface. A lot of people, especially in technology, people look at products and they overfit different products to, to being the same.

Right?

So they'll look at our identity and Microsoft's identity and they'll say, oh, they're both identity. It's the same. They're competing. But the reality is that it's, when you really get into the details, an independent identity product that's going to connect you to multiple clouds and multiple systems is pretty different than what they have, which is pretty coupled to their environment.

And I don't know if this happens at Okta, but it happens with a lot of other vendors with similar dynamics. Do Microsoft and Salesforce generate leads for you when they buy the internal product and they realize, hey, I need more, like I need more than just something tied to Microsoft. Salesforce, and then they reach out to the sales team wanting to do more.

It happens a lot. And it's not just when they, it's, I would say it's when they just buy Salesforce or buy Microsoft, right? Yes. And then it's also when they look at that product. It happens with Amazon a lot too. Like Amazon has some developer tools that they're, Amazon tends to, they're, they're doing a lot of things, but nothing super deep.

I see.

They're successful a lot with the services that are broad and, and don't have to be super deep. But the ones they have that are more, not as deep, they tend to get customers excited about them and then they need a real alternative once they get rolling.

Yeah. People fear when the big company launches something that either isn't as enterprise or as nichey, that often can be an incredible source of leads for you, right? It's not just evangelism or making the market, it's that they just don't do enough and they outgrow that vendor. And so it can be a gift.

Yeah. Yeah.

It just might take a year to figure it out.

Yeah. Yeah. It's, um, I'm being real, Jason M. Lemkin. It wasn't like overnight I was confident.

No, I know. And it's funny, actually the scare, the part that hurts me a little bit is that you felt that way at $30 or $40 or $50 million in revenue, not $5 million or $10 million. I like to think that's unkillable. Maybe you think it was looking back, but at the time it didn't feel like, if you still felt like a startup, didn't you?

Yeah. Yeah. I think that's true. That's true. It is interesting that the, the whole point about the early psychology and like how it impacts how you go about things. This idea that I heard this over and over, it's not big enough. It's not substantial enough. It's not gonna be a big market. And even till 2 or 3 years ago, I would explain the company to investors in this pretty broad and platform way, and it's this big thing. And they would look at me and they'd be like, wait a minute, it's like single sign-on, right? It's, you get one password for everything.

Why don't you just say that?

That's awesome. I would love that. And a lot of it is just because I have the scars from when I had to really make it this big thing when I needed, people needed to believe in and eventually it turned out the cloud got plenty big enough to solve a lot of these issues anyway, didn't it? Yeah, that was a good bet.

And then one last one on this piece, and then I wanna make sure we have a few minutes to talk about the other points, but it was a funny story about competition. You were worried about competing with Salesforce. There was, you didn't even hire a single person for 4 years to try and maintain the relationship, but it didn't make a difference, did it?

Yeah, I was, I was running engineering there and it was pretty sensitive.

You do the good ones.

Yeah. Yeah. And I, so yeah, and I didn't wanna piss off Salesforce 'cause I figured that they would, they would be a good partner. They would. Help sell our product or, yeah, it turns out that like a lot of companies, Salesforce is more into selling their own product than your product. So it, it did end up being a, it did, it did not end up being that, that helpful to have that relationship. But like a lot of things, you gotta do it on your own and it's not, no one else is gonna help you do it.

Yeah. So two things I wanna make sure we hit before we run outta time and just take Q questions. I know we've gone long, but there was one, um, great thing that came up when we chatted yesterday. You had a tweet the other day. Talking about the latest Gartner release in your space and saying, we're, we're, we, we're a market leader. We're the number one in the space, but we want to do even better, right? We want to be even higher in that magic quadrant. And it was so transparent and I thought it was inspirational. It was very direct. And what was the messaging there? What were you trying to say? And how do you, what were you trying to communicate to employees and to customers with that message?

I think it's, I, I, so I think it's really important, especially for employees that We at Okta, we try to treat employees like owners and builders. And part of that is being straightforward with them.

Yeah.

You know, one of the things about being like, everyone in the audience knows that it is building a company or starting a company as the founder or early employees, they know that they get all the information for better or for worse. And it's like that feeling of, it's really, it's really empowering to people. It's, I know what's going on. I can, in fact, with Okta, we did this in the early days and it, And we continue to, to do this today. But in the early days, it was like, I didn't know how to figure out all the problems. I needed help. So the team sharing it with the team rallied the team and helped us survive basically in the early days. So I think the Magic Quadrant, we got the ma— the new ma— which is really Magic Quadrant is a, in our environment with enterprise buyers, it's pretty important. And last year we were like way up in the leader position and this year we came down a little bit and the other competitors. Got around us and caught us a little bit in the quadrant. And it was, everyone's bummed out when that happens, right?

Everyone.

And then, and then everyone's natural reaction is, oh, we gotta like, how are we gonna spin this? What are you gonna say that maybe we blame Gartner, we say they didn't do the good job, or oh, it's the competitor, Microsoft paid 'em a lot of money. It's all this crazy ideas that aren't true at all. And so I felt like the best thing to do would just be tell the employees that, hey, I'm disappointed. Here's what the feedback was. And by the way, we need to listen to feedback. We have a lot of things we could do better across the board, and this is a good source of feedback. We might not like it, but let's take the feedback and get stronger. And I think it, and the last thing is I just, I saw that the tendency not just to rationalize it internally, but the tendency to like maybe brush it over and not address it, which I also think is, I don't know, just not genuine and it feels It doesn't give the feeling to people like they're that builder and that owner and, or even customers or prospects. Like they want to know they're dealing with a company that is forthright and transparent and honest and they can trust with their security. So it's an important part of our brand.

I love the thing that you said, which is 99 times out of 100, truth's your friend.

People, yeah, people are, most people are good people doing the right thing and sometimes they can complicate the communication part of it. And if they can just be honest and open and their people are going to, yeah, the truth resonates and people, it gets, especially now where there's so much transparency online and buyers are discovering things and watching, talking to their peers and so forth, that the more transparent and truthful you are, the more trust, trustworthy you can be perceived, the stronger your brand is going to be.

Yeah, I love it. And then your follow-up was, don't worry because we worry about this as founders, especially when we're small, is don't worry about drawing attention to something. Just just handle it head on and it, it's okay. Your customers get it, your employees get it, and don't worry that bringing it up, talking to your customers, talking on Twitter is gonna bring too much attention to a question.

Yeah. If it's a relevant question and if it's a relevant issue, yeah, the people that it matters to are gonna know about it. Like for us, the people that look at the Magic Quadrant have already looked at it. They're not gonna go look at it and see our position went down a little bit 'cause I tweet about it.

Why don't we, there's more stuff I'd love to get into, but why don't we wrap this up with just—

I think we got through one slide, Jason.

I know. Do you think you can close a 7-figure deal without getting on a jet?

Depends on if the competitor does. I think that the, that the, when you're showing deference, like when it's a doing something that a competitor will or won't, might be more complicated.

All right. Just two more and then we'll wrap it up. Cause this is so great. One was just a super. Specific question on your interviewing process. When you interview, when you do interview directors and above now, or VPs and above, where do you drop in? At the end, in the middle, and do you veto today or do you just provide counsel during those interviews?

I, so it's at the end.

Yeah.

And the purpose of it is it's really not a, it's not a, like a, a veto thing. It's really a, I want to talk about the culture and I want to build a relationship with the person. Yes. So that I feel like I have. More of that connection and that can be a more effective leader for those leaders. And that's the purpose of it. It does, it has a good impact on the people too, as they should feel. It makes them feel special. It makes them feel like the CEO cares. And I've probably done, I don't know how many of them I've probably done in the last 5 years. I've probably done 500 of them.

Yeah.

I did veto 1 person.

1 out of 500. Yeah. It's 50 times more impactful if it's before they start than if it's right after they start, isn't it?

Yeah, for me too, it's, you learn interesting things. You talk about their companies, you talk about, you learn a lot about what's going on with other companies and markets and stuff. It's interesting.

All right. This last one, it's so the last lesson 6 you had, take more photos. You have to have gone, you have to have been a founder and gone at least 5 years, I think, to get this one. And like a little tear to my eye came when I saw this. What does take more photos?

I know what it means, but what does take more photos It's the hard thing about what we were doing, you were doing, and what a lot of people in the audience are doing is that, but the definition of it is that you don't know if you're going to succeed because if you knew if you're going to succeed, it would, you would be not making the right big bet. You would be not creating the category. You'd by definition not be doing what we're all trying to do. So then in that uncertainty and in that apprehension, Yeah. You're like, why do I need to take a photo of this? This might not all work. It's not going to be something we celebrate about. But I think take more photos is you have a chance and it's going to be amazing. And it's almost like it's the sun will come out. It's, it could work out. Make sure you take photos because you're going to look back at this and love these early days when, when you weren't sure it was going to work out, but it turns out it will. Yeah.

And celebrate all the mini victories, right? Don't, it's as CEO, I know it's back to work the next day, but you've gotta celebrate them though. You, we almost all undercelebrate the mini wins, don't we?

Yeah. Yeah. Yeah. Yeah. Yeah. Any, yeah. Especially when you're trying to, when you know the next battle's coming.

So it's always coming. All right, Todd, this was incredible. This was one of, this was a terrific session. A+.

Yeah.

Thank you for all your time. Talk with you soon.