David Ulevitch (OpenDNS): Learning to Love Enterprise Sales

You got a zinger?

Do you have a zinger?

Yeah, we need like, like, like just give me, like a bad joke real quick or something like that. You got one on sass?

I don't know if I have a zinger on hand. We'll save them for throughout the discussion.

Yeah, right. Yeah. All right, so how about this? Let's wish David luck in the crunchies. Yeah.

All right.

Well. All right.

Very good.

What do you call a stick that doesn't. What do you call a boomerang that doesn't come back when you throw it?

I don't know. What is it? A stick.

A stick.

All right, very good.

I'm glad I.

All right. That deserves a drum roll. So I asked. David was gracious enough to join us, and I thought he would be fun to chat with for several reasons. First of all, he's a great CEO, a great founder. He's gone through a great journey of learning to love and learning all about enterprise sales from a very broad denominator background, which I want to chat about. And also a great case study of someone that's sort of in that pre IPO phase and getting there to kind of balance out the team. So I think we're lucky. Very fortunate to have you, David. And before, I want to ask a lot of things, but step back, and I want to focus on sales and enterprise. But give us kind of the. The 122nd version of your whole journey to what open DNS is today. Right. Going back to this whole journey that you sort of been on. Right.

Well, I'll start with today. We are enterprise cloud delivered security service. So if you think about the transitions in the IT landscape of people moving and working outside the office on myriad devices and using cloud services like Box and Netsuite and Zenefits, it's a radically different IT landscape than the one that people had originally thought about enterprise security for, where they just stack a firewall at the edge of the network. And so we developed a cloud delivered equivalent that replaces that sort of bump in the wire that you have at your office and delivers it as a service. We now have about 260 to 270 or so employees, depending on what day of the week it is, and a big, rapidly growing sales team. We opened up our London office last week. Our customer segments range from some of the largest companies in the world. We have global deployments with two of the Fortune 10 now, all the way down to various small mom and pops. I mean, one of the beauties of SaaS is that if you can Stomach, the sort of cognitive dissonance. You can really serve multiple markets at once. We can probably talk about that a little bit. And the original journey started as a consumer company. We were building a security service. It did very well from a customer adoption standpoint. We've always been a great products company but I would say we were building great products maybe for the wrong market or we had the wrong business model. We originally had an ad revenue model and we discovered that building a great product for users over on this side, but getting paid by advertisers on the other side was really this sort of intractable problem where advertisers wanted pop up ads and flash ads and all these things that are sort of, you know, intractable when you're trying to build a security company. So we eventually made the transition to actually say, hey people that we're building a great user experience for, why don't you pay us money? And it turned out that that constituency was businesses. And we can talk more about that.

Yeah.

And yeah, now we are on the path to building what will hopefully be a very large enterprise security company and maybe in the long run a just general security company.

So you've gone from ads to six and seven figure deals, right? I mean you couldn't be more polar opposite on the continuum of the ways to make money.

It's been a long journey and a long move up market.

So I mean a lot of stuff. So tell us, you know the uber learnings there, building the first sales team, kind of the things you had to get your arms around and learn to make the transition.

Yeah, I mean I will say when I talk to Jason, open DNS always comes up as these companies where there's maybe an engineering based founder who doesn't really know much about sales or doesn't care. And then so that transition to a.

Fight, I mean, yeah, it's a massive transition. You got to change the whole culture of the company, the whole team. And in fact we did that in 2009. We took about 25 people or so. I would say about three of those people are left from the consumer business and the enterprise business. So of the 200, including engineers or.

You mean just really?

I mean some people are really excited about building a consumer service and the idea of, you know, building delegated administration and access control, they can't do it. All the enterprise features, it's just not what interesting to them and that's okay. But we ended up having to transition out most of the team and then for me you really have to get comfortable with Building a product that is listening to your customers, customer focused. We can talk about that, but it is a journey. One of the hardest things for us, I think, was getting comfortable with the fact that we had built a product that people felt like it was worth paying for because we were so used to giving away things for free. And that was a personal challenge. But we also lucked out. Our first customers came to us, right, because they were using our free service. We had a global, you know, one of the largest oil and gas companies in the world using our free Service. They had 100,000 people using this thing. And I think we did the analysis and we were making, you know, buck 87 on ads from them. And they finally, their lawyers called us and said, hey, we need a support agreement. We need like an SLA and a phone number to call for support. And there was no phone number. And I think we told them for 100 grand we'd give them a phone number. And that was the beginning of the enterprise business. It was pretty good to get 100 grand. And by the way, if you had found my phone number, you got free phone support anyway. So now this company was giving us 100 grand for it.

Can I just ask people to please put a phone number on your website? I know it's very cool to not have a phone number. I don't have one on mine, but I'm going to put a damn phone number on your site.

Yeah, same with web chat. I mean, we have a phone number on our website that you can call and a real human picks up. We also have that stupid web chat thing that pops up and it's like, do you want to talk to somebody? And whenever I see those, I'm like, there's no real person on the other end, but there are real people. And like, you know, you could be a CIO of a Fortune 500 company, and they occasionally will ask a really technical question. And so the person on the other end of the line has to be pretty well trained in your product. And it's actually a way of creating leads.

I doubled the clay just lead pages instead of double their conversion rates. Like at lunch, I saw them.

It's crazy that that stupid live chat thing is effective. I mean, I'm not a personal user of that live chat thing, but people use it all the time.

So, Dave, let's go back. So you've got it. You do this radical transition, you lose 20 out of 23 on your engineering team. I lived it, tried to hire gamers. Never works. And selling a business product Right. So who.

In a way, I'm skipping some of the drama where there was a CEO transition drama. There was like a minor coup d' etat and then I back as CEO and some of the people sort of bailed out because they were like, that wasn't like a bad week or bad month, that was like a bad year.

A bad year.

I mean, half, we all have a year from hell. It turns out half the team just bailed out on their own.

Half the team did. Okay, well, if we had more time, we could go through the cathartic side of the story. So you go through this year of hell, Right. It's tough, huge transition. Was there a great hire? You made a great someone that kind of. Because in a way it's a very unique. I mean, we all have the same story, but in a way it's also like a lot of folks trying to figure out how to sell to the enterprise that haven't done it before. It's just you had, you had a few, you had a number of years before you on the product side.

So who helped you? We ended up having a CTO who came from an enterprise security company who basically called us and said, hey, the future of security is going to be cloud delivered and you have this global infrastructure. The future of security is going to be based on analyzing data. And you have 50 million daily active users. You guys should be doing enterprise security. And he was actually the CTO of Websense at the time, one of their first employees. So he basically pitched us that we're sitting on this gold mine and we're sort of screwing around with this consumer business. And so we hired him and that was the first of a number of executives who had sort of been there and done that in the enterprise space.

And what role did he join at?

So he joined as CTO and that was January or February of 2012.

Got it.

And then we built a whole enterprise product that was sort of mediocre enterprise product. And then In January of 2013, we hired a VP of Sales to go out and start selling it. And he came from an enterprise sales background. And we've now filled out the full executive team with people that are well educated in the SaaS metrics, the SaaS economics, and how to really go to market and sell a product. And they certainly educate me on a daily basis.

Yeah, revenue roughly like 2012 to now. What was the.

So we. So let's see, what numbers are we talking about now? So we've. Here's some numbers. So our average deal size has increased almost 10x on enterprise size on the enterprise side in the last eight quarters. We've done about 123% CAGR since we launched the enterprise business year over year. So that's growing north of 100% year over year. For the last three plus years, we're averaging 20% quarterly growth and we now have four years worth of cohorts that are now starting to renew that we're starting to upsell into. So hopefully we'll see that accelerate in 2015.

Yeah.

And yeah, on that path to the $100 million ARR number, which is something that the whole company sort of is. We're pretty open and transparent companies, has sort of eyes on the prize and we're very transparent from engineering all the way obviously to the sales side about.

How we're performing and where does the. Now, I want to talk about other things, but how today, how does sort of the longer tail of the open DNS brand help with the customers today? I mean, obviously it built awareness over time. Is it still helping today? Aaron Levy was on earlier and, you know, his point was it helped him until like 2020 12, I think, or 2011, and then it didn't matter anymore. Right.

Yeah. Well, Aaron's certainly a few steps ahead of us and we would love to follow through.

You were just on the same. You're just trailing. Right.

Similar trajectory, a few steps behind.

But you've got this brand. Right?

The brand is awesome. And actually, Aaron and I have talked about the brand because we were contemplating a name change because at a certain point, the name opendns is really stupid because we really do a lot more than DNS and we're not that open. And so I would not advise you to pick a literal name. But then the solace we get is Salesforce is really much more than just a sales product now. It's more than CRM. So if it worked for Salesforce, it can probably work for us. But we do find that the brand helps us. When I go to a customer and I say, hey, I'm from opendns. Have you heard of us? They say, of course, I use it at home. And I say, have you heard that we have an enterprise security product? And they say, no, tell me about it. And that's very different than calling and saying, I'm from Threat, Force, Box, Grid, Zen, whatever. Have you heard of us? And they're like, no, I don't. You just said words. And I don't know what they mean.

Security, chimp.

Yeah.

So they'd home Thing it. But let's dig in a little bit more. Now when you're selling really to the sales office and you're selling a security product which is not easy. Right. Does the long tail brand help there too?

It totally helps. I mean we definitely have champions inside of our. So the way we sell security is we start with like a CIO or a CISO who's usually saying most CIOs and large enterprise companies have sort of their right hand man or woman who's their technical sort of check it out, check her outer kind of person. And so they'll basically say hey, this is interesting the problem you're describing, that I have no visibility outside my corporate network, that people are using their own devices at Starbucks and using Box and Salesforce, those are problems. But so I want to deal with that. If you can go get my champion, my sort of technical wizard on board, that's our next step and we go and get that person to use our product. I would say one of the benefits of SaaS and this is atypical in security, almost every one of our customers is using the product before they buy it. And that means that after they buy it there's no sort of big surprises of like oh, I thought you did this thing that you don't actually do. Or we're like no, because you were already using it. So you know what it does on the bigger deals.

Does that sort of impact account management, deployment, customer success?

Yeah. So our sales engineering team is much more technical maybe than most SE teams and we have very little post sales support that we have to do because again most of the customers have already gone through the. I mean it's not that arduous to deploy a cloud service, but they've already gone through those hoops and that certainly helps. It also has a huge benefit for Churn because if a customer is using our product, we track that they're using it. We know in the selling cycle like our salespeople can see from there's like a thing in marketo these interesting moments, things where you can see that somebody is sending traffic through us and they've added networks and that we're blocking security threats. And that makes a sales conversation much more sort of fulfilling and valuable because you can talk about how they're using the product and then by the time they close we already know they're happy. And then when it comes time to renew, we've already tracked them that they're using the product, they haven't stopped using it. And so we have all that Visibility just like you would have. I mean, I'm a product CEO and so this is sort of extending that product management mentality throughout the whole customer life cycle.

Yeah. So let's talk a little bit about product co and the change. So before opends went deep enterprise, right? How much time did you spend with.

Customers before it went deep enterprise? I mean, very little because we had 50 million. And when I wore the T shirt, sometimes people would say, hey, I use opendns. And I'd be like, oh. So never met with a customer, Never with a real customer.

And how much of your time now do you spend in a customer connecting?

I am on the road all the time and I fly on like the most annoying routes to like the oil and gas cities. I flew 150,000 miles to say that again.

How many?

I flew 250,000 miles last year. Almost entirely domestic and almost entirely on like the smallest united province, like to Tulsa and Calgary. Occasionally, like if I'm lucky, I get to go to New York.

Yeah.

And so yeah, I'm in front of customers at least half the time. We do, I think we want to talk about at some point, we do these roadshow events, these dinners.

I want to talk about that next.

Yeah, yeah, the steak dinner. And if you read Benioff's behind the cloud book, he talks about the effectiveness of this. And you know, we bring in about 30 prospective customers and I try to plant the room with, you know, maybe four or five existing customers because I'm pretty confident that we know our customers are happy. So it's nice that I don't have to be the only shill in the room. There's people, there's peers that can talk about how they use the product and the other issues they're facing.

So hold on, let's just dig in a little bit of that. So it sounds like you probably spend something like almost a third of your time on the road. Maybe half.

Yeah, half.

Okay. And it sounds like a lot of that is events like Aaron talked about. You're trying to get the steak dinner, which I want to talk about as a concept. But the goal, and the goal is to seat it, right? Have five customers in the room and 20 prospects. Right?

That's the goal.

Yeah. And so most of that time on the road, it's not one on ones, even the biggest customers, it's doing these, these sort of micro events because you've got the high acv, right. You've got the high deal size. You only need to close one customer out of that to Impact this quarter.

Yeah, the economics are super clear. The ROI is extraordinary on an event, on the roadshow events. And I do occasionally meet with customers one on one. That is not the highest and best use time, but it does happen. We have customers that like coming to our office. I mean, a lot of customers that are out. If you're a Northwestern Mutual in Milwaukee, the idea of coming to Silicon Valley and we'll set you up at our office and we'll set you up at a couple other enterprise companies, it's really appealing. But yeah, we do the dinners and it's, you know, I'm chief dog and pony show officer and I do the pitch. I get up there and I answer questions and I'm pretty technical. I do a demo of the product and after that, anyone who's not already on a trial. Almost everyone goes on a trial after that.

Yeah. And you have. And how does that. Because I think it's helpful for the audience. How do you work with your VP of sales on that? Like we were here earlier and with GuideSpark and the VP of Sales Sheps that I think he sets up 60 and 60 appointments.

68.

68. And half of them are for prospects and half of them are existing. How are you especially. You're doing the demos, Right. So how are you managed?

Wait, wait, whose VP of sales sets up the appointments?

Yes, Shep is the VP of SVP of Sales with GuideSpark.

Oh, yeah, I need that. Why don't we do that?

Sorry, both may be talking too quickly in the afternoon.

I'm going to LinkedIn Connect. Okay.

It's Bar gets one of your most popular case studies. I can see a new chapter actually in the book come in. It's titled Steak Dinners are Alive and well.

Yeah. They perform. So.

But. So I will say we do find that. So we also do these dinners with partners because it is hard, especially if you're in a major metro. So the smaller of a geography you're in, like if you're in Tulsa, you can pack a room because there's nothing else going on that night. If you're in New York City, it is. I mean, it's just. It is what it is. If you're in New York City, it's very hard. People are working late. There's a ton of things they could do on any given night. They need to commute out of the city. So we usually will partner up with either another security company that's a friend of ours, or we'll work with a var. So a channel partner and that will Help sort of create a little bit more of an appeal. Because a steak dinner in New York City is not as appealing as it might be in Dallas or Houston or Tulsa.

Yeah, the sort of joint partner CIO kind of thing that actually performs pretty well, doesn't it?

It's great. Especially. Yeah, especially if you have one of your customers talk a little bit about their experience, which most are more than happy to do. I mean, people love to sort of stroke their ego and talk about their sort of thought leadership in the space. And we learn a lot. So it works out everyone. It's like a win, win. Everyone wins.

So it sounds like you will have personally interacted at least 20 meters away, 20ft away, with just about every customer you're going to close. Right?

I would say that any deal over 100k, I think that's true. And then if it's under 100k, I would like to eventually. Yeah, but certainly, I mean a lot of deals, I mean, it's hard to know exactly. We do like, you know, these are all multi touch marketing activities. And so it's hard to know if, you know, if I didn't, if they didn't come to that roadshow dinner, would they have eventually closed? Probably. But I would say almost every large deal that closes or even after they close, they still come to a dinner and it's, I mean, they're fun events and we learn a whole lot. We learn from, you know, what challenges people are facing, we learn what parts of our product need improvement. And then they always try to play stump the chump, which is sort of a favorite game of tech people to try to ask you some question that they think there's no way you can answer. So you get pretty adept at.

That's a winner. Yeah. Is it hard? And a follow up question on it. So you go from wearing your flip flops and your T shirt to flying to some of the smallest minor metropolitan areas in the country. Was that, I mean, no matter what anybody says, getting on jets is not that fun. Right. Even if you love your iPad, when you're up there, you got to get there, you got to wait. You get sick. Right. So is it two things? Was it a rough transition?

And yeah, so, I mean, the flying part is not super appealing. Being in front of customers is actually really exhilarating. If you have a good product, it feels really good to hear people talk about enjoying your product and liking your product. That certainly more than makes up for it. And then the fact that you know that if you just close one deal, the Whole thing has paid for itself more, more than, you know, more than once or twice or three times or four times over. I mean, if you imagine that you get like a 400k ARR. Deal out of one dinner, that more than my time is absolutely worth going.

Yeah, that's the math. Right? Yeah. Because I find that, you know, it can be a rough transition to get to doing that from not having done it. Right. And I think if entrepreneurs can't do it, they're probably going to fail. Right.

Yeah. I think you got to get on the road. I mean, I certainly believe if you're trying to do. I mean, if you're in a super transactional business, maybe I think you're always looking in front of customers or whoever your constituents are, but you just, it's just, you know, it's not that bad. And once you start flying a lot, then you basically get upgraded a lot. And so it's not as horrible. And the upgrade's less about the plane, it's more about not having to wait in security, get global entry, get TSA PreCheck only fly, carry on, wear like three outfits and then it's just not so bad.

Yeah.

Or you just, you know, it's like, I mean, it's definitely not the worst part about being a CEO.

Yep. So a few related points. So those are. So, you know, the last 12 months is when you've continued to see sort of the, the dramatic enterprise growth. Right. So what's changed a lot the last 12 months on sort of the sales and revenue side?

Yeah. I mean, I'd say we're a very different company today than we were 12 months ago. And we're a very different company than we were 24 months ago. And we'll be a different company 12 months from now. We have three swim lanes for sales. We have an inside sales team that's doing sort of over the phone transactional sales. We recently split that team. We realized that some of that team would rather go outbound and hunt for deals and hunt for a 30 or 40 or 50, 50k ARR. Deal. And then there's other people on that team that would rather sort of deal with the inbound flow and deal with maybe the 5 to 10k ARR. Deals. And what was happening is it used to just be one team. And so the team, the people, the men and women who wanted to be hunters would ignore the inbound 3k deal and just let it fall on the floor. And then the people that we thought could be hunters were getting just sort of bogged down with all these BS deals that they didn't want to spend time on. So we really split the team. Now there's a team that's going outbound and prospecting and focusing on larger opportunities, and then there's the inbound team. And that swim lane has their own sort of issues and challenges. And then we have a field team that's going after the 100k and up deals and they're scaling. And the challenges we have now is that the messaging and the marketing positioning that we have for those different swim lanes and I didn't talk about the third swim lane, but we can get to it. Maybe the challenge is that you want to give a different value prop to those different audiences. And it's almost, it turns out now we didn't think it would be possible, but it turns out it's almost as hard as dealing with consumer and enterprise at the same time, which is very difficult. It's hard to know on your webpage, are you talking about simple and easy to deploy or we find threats that nobody else finds because different audiences care about that different kind of messaging. And it creates this cognitive dissonance of not knowing how to.

So we all struggle with that. If we have an application that's spans different customer side, what are your any learnings from how to. I mean, it's not a totally solvable issue, right?

It's not a totally solvable issue. I mean, you have to focus. I mean, I think when I first met you, we still had our consumer business and I think you looked at me like I'm nuts if I thought I was going to be able to prosecute both activities at once. And you were right. I mean, we basically have put the consumer business on hold for the moment and if anyone wants to run that business, we're taking applications. But it is hard to prosecute multiple activities at once. You do have to find focus. And right now our field enterprise, our enterprise field sales team is sort of on a runaway from the revenue standpoint, which means it's going to get increasingly hard for us to spend mental calories on smaller deal sizes that have lower volume. So, you know, but we're looking at things like exploring CDW as a channel to deal with the lower end of the market and focusing our internal marketing efforts on the larger side of the account. I mean, we did an analysis that the amount of energy it spent to get a 10k deal is actually the same as getting a 100k deal. So if you think about where you want to focus your sort of Your areas of energy. You can't focus on the 10K deals when you know you can go get the same number of 100k deals.

Yeah, it's hard to build a big business out of little deals.

It is very hard. Unless you're Zenefit, they have the magic sauce. But it is hard.

I think there's a unicorn session at the end, day of the day, actually.

And as you go, you know, as you, as you, as you, as the math becomes clear and the 100k versus the 10k and these 2k deals seem like you've just got to give it away. Does that one of the things that's happened is you're sort of solidifying your market position in the enterprise. Without question, right at the bottom of the market, which you're less interested in. Does that open up opportunities for competitors at some level? Because there's only so much effort you're going to put into a $200 a month deal. Right.

You know what, we talk about it all the time that why would you want to give up the ground you already hold? But you have to focus on where you think the biggest opportunities are. You have to. So, yes, it opens up opportunities for competitors. I don't get into security. It's terrible.

Yeah. Don't even consider it. But it's sort of my salesforce. There's 10,000 small CRMs because salesforce can't play around in that space. Right.

It's not worth it. I mean, it does open those opportunities. The other thing that happens is, and if you read Crossing the Chasm and you read it every. I mean, I probably reread that book every night, nine or 12 months, just because it's sort of cathartic. You have these early, early, early adopters that start to get annoyed about your price increases or the fact that your product's getting a little bit more feature rich in a way that they don't care about and you're not building these cutting edge features that your early evangelists really care about. And so I sort of get emails periodically from some of our earliest customers that I spent time with and they're like, hey, why does your roadmap look so screwed up? And it's like, because you're not Exxon and if you were Exxon, you would want those things.

Yeah.

And it is a little bit painful to constantly, once a week almost, I get an email from someone asking why we're not building their features, why we're building some other features. And it's because you got to make the Tough choices.

Yeah, yeah. So I mean you've got to take your small, medium, large and stack rank it in large is getting, I'm guessing 80% plus of the maybe 100% plus of the development.

Yeah, we try to focus on things that are applicable to the whole spectrum, but there's always going to be features. I mean, you know, the small 20 person company doesn't care about active directory integration.

So yeah, that makes sense.

If you're a hundred thousand employer, bigger company, you need it, you can't close the deal without it. It's table stakes.

So a couple things I want to make sure we have time to dig in on. You brought up a fun one, which is competing against incumbents. Right. So tell us what you've learned as you've gone more enterprise. Especially because security to me is interesting because on the one hand people are worried about security, so you can get a meeting because if you don't know what's out there, Right. You might not have the best protection. Right. But on the other hand, change is tough. Right. So you know, in a couple years you'll be the incumbent. But how, what have you sort of learned selling against that successfully?

So the security market's super fragmented. The dining table of security entrees is overflowing. And so we find that rather than trying to position ourselves necessarily as a replacement for an existing solution where they have 10 years of feature checklists that we don't have yet, where they've done R and D for 10 years on little esoteric corner cases we don't have, we say, hey look, we're protecting you outside the perimeter and you're not getting any protection there. That really awesome Palo Alto firewall that you bought, it's only doing its work when you're in the office. That's a 9 to 5 security model. We'll give you a 247 model. So we don't have all their features, but right now you're totally blind and we can give you visibility there. So we try to change the conversation about things that they don't have that we provide and really say, look, you can layer us in as an additive solution. And one of the selling motions we've discovered is that most of the hardware appliance models, they're used to spending. The customer's used to spending maybe 500 grand on a metal box, but in the ARR model they're actually spending much less up front. And so it seems less expensive to add in this additive solution because maybe it's only 150k arrow that what sort of. The equivalent would have been 500k. So we try to change the conversation and say, hey, look, you don't need to compare us to your existing thing. This is a whole new security landscape. You have no protection here. Let's go and cover that and give you visibility. And then we're not in this feature. Bake off. It's more like, are we giving you value and proving that this thing actually matters? This area over here.

And do you find. So if part of the pitch is say, hey, Palo Alto Networks is great for your office, right? Do you find that. But budgets are. At the end of the day, budgets are elastic but fixed, right? So do you find, I'm just curious, do you find that, that pricing, when you use that argument, does it bound some of your pricing? Right? Because in a sense you're expanding the budget, right?

We think that again, this is where you get into those two swim lanes and different swim lanes of sales on the high end of the market. If you can prove very concretely that you find threats no one else finds and you're easy to deploy, there's budget for you. There will always be budget. Nobody wants to be the next Sony. The chairwoman of Sony just stepped down this afternoon. Nobody wants to be that CEO. Stepping down. The CEO of home of Target also stepped down. Nobody wants to be that segment.

No one wants to be that guy.

If you're in that segment of the market and you can prove your value and you're deployable, there's always budget in the mid market. There is some price, there's less price elasticity there. And that you are, it is more competitive. And so there's different messaging that we go with this, that look, this is easier to manage, it's easier to deploy and you don't have to deal with bandwidth upgrade cycles and new hardware and hardware refresh cycles. And as our service gets better, yours gets better too.

So let me go back because it's a fun. Maybe we'll have time for two more questions. But when you're in that real enterprise scenario, so you don't want to be Sony, you don't want to be Target, right? Obviously, whatever the cost of Those breaches are 50,000th of open DNS or 500, right? So, but how do you provide context around pricing? This is all still software, right? Cost a lot of money to build, not that much money to ship, right? So how do you provide that? Because the ROI in theory is so high, right? Is it against competitive comps or how do you figure out what it should cost.

So we're really bad at that. We've raised our prices. We've raised our prices four times in the last two years, roughly 30% each time. We had a woman we hired to run products at our company did an analysis of, of discounting about a year ago when she started and found that on average the sales team was selling at negative 20% discount. So on average every deal was selling 20% over list. And we don't actually list our pricing, which again this is part of that transition. To me the idea of not putting your pricing on your website was crazy. It was like only a hole. Companies don't put their pricing on their web page. Then you learned phone numbers. Yeah, you have to. And we also used to to sell the whole kitchen sink and it turns out customers don't really want that either because they start to say, hey, well I don't want that feature so I want to pay less. So then you start to really start to segment out the product skus. So we continuously raise our pricing. I think that because we came from a consumer sort of heritage and then sort of went up to SMBs and then have now switched to the whole high end of the market, we had to get comfortable with the idea that we had this really valuable offering and that our security turned out to be better than we thought. Now it was more of like an internal confidence thing that, you know, that we really felt like we had confidence in our offering and now we do and so we've priced accordingly. And now it's a premium security play.

Yeah. And just curious, probably last just. So then as you've gone through that journey in 15, did you figure out a strategic plan as a way to raise your ACVs materially?

Yeah. So we look at all the different knobs like do we want to get more dollars per seat, do we want more seats per deal? Do I want to upsell additional product to the existing cohorts? And like we sort of have the little, you know, a heads up display of like what are those little dials? Do we hire more reps that we want to ramp up and just carry more quota and you know, so we basically look at which dials do we think are the ones that are most in our control? Sometimes it's product that adds more value, sometimes it's going up market to get more seats per deal and sometimes it's trying to just charge more dollars per seat and when you turn all those dials at once, it sort of becomes a force multiplier. I mean that's why. I mean, our. Like I said, our Enterprise team is 10x to their average deal, deal size. And it's a combination of all those factors. And that certainly has been a good way of sort of taking, I think, that product approach and using those same sort of analytical methods of how people use your product and what they're asking for and then driving it up market.

That's cool.

All right.

I wish we had more time. This was amazing. Thank you. David. We're going to root for open DNS tonight, right?

The crunchies. Yeah, yeah. Good.

All right. This is. Was terrific.