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

Thank you for joining us at Saster 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? 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 Sasser.

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, 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 bit. 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? That's the. I can't trust my credentials in the cloud.

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

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, uptime and security were critical, were actually more critical than features for you pulling away.

We. I think the first thing was that 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 a SaaS business application or SaaS email was, 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 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 of the time. 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 this service is going to be reliable and scalable. And then we also spent a bunch of. We, I remember we spent seven or eight 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 four hours every three months for maintenance to upgrade it.

Yes.

And that was the way things were done. But with Okta it was your front door. You couldn't take it down. So we had to spend eight 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 gonna. What are they gonna say when we tell em to take the service down for four hours? They're gonna 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 sense 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 refactor three times.

They do. But I wonder and. And you were pretty senior in engineering at Salesforce, right? If 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. 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's so meta. It can't ever go down.

You can. I'm not saying once you make it, you can refactor it, 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, because I still find the topic stressful and cathartic. Is how much. On the one hand, you had to take these eight 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 way 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 hacking scale, how much was okta hack before you spend eight months building that reliability?

I can't say okta and hack in the same sentence. It's my 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 matter. 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 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 two or when did you do that eight month project to have no downtime?

Year one. Yeah, year one.

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 will 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 strategies 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 unless 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 a hundred 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 wanted because 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 a hundred 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 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 could, we had instead of two logins, you had one login to two. It was great and. But it was in 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 kind of the fat into the distribution where it was the common ones. And then for a long time it was. It took a while to start to work down the long tail. But that's when the benefit of this became really clear. When you could go into a company and you could cover 90% of the apps they have. Right.

Got it.

So I would say that the fat part of the tail, the very common apps, everyone has got us started. But I would say within a couple years we built out our catalog so that you 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? Cause it happens to a lot of us.

Yeah.

In the early.

So in 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 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 gonna 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 you 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 gotta 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 unscalable work for longer. You built more of the integrations yourself.

Oh yeah.

Because a lot of us hope that this API we build in year one, that developers will go 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 three bets that Okta is still working on today. There's cloud, which was ended up being an A plus with an important note that going to 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 plus, if you don't get one big bet, you're probably gonna 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 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 times and we kind of 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 making it just amazing on the 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 four end mobile that wasn't great in there. If you look at their S1 it was mobile was like a risk factor and three or four years later it was mobile. It could disrupt their web business. And four or five 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 when you were so enterprise and so it focused and maybe developers were not as big a focus in the early days.

Yeah, we. So our. I mentioned earlier 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 based partners or common thing was like insurance brokers 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're like listening to this for a while. We're like do you really want to do that? 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 plus to work perfectly for the developer was something if I had to do the last 10 years over again, I would've 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 you think 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 if it was just a team or a website, maybe it wouldn't be that much of a problem because you could do it Quickly but 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 great engineer, but 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 never used to make but for sure since logging into computers in college. So the customers got it.

Punch card. That's a.

What's that? Yes, it'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 manually. There was no way to do it. But yeah that was.

I'm the.

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 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 huge. It's going to be worth billions, guys, trust me. They'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 customers 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, local. I forgot when that was hot. Yeah, that was hot.

Yeah. We're taking off and. 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 and what's going to 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, 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. 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 ar, 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 when. Cause we all wait. It's always seems to take too long.

Yeah, yeah, for sure. I think it was, we were probably like 50ish error.

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 outta 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 is in the cloud now. Of course we added anything. And then the second thing was that this companies want to see a choice. They, they don't want to just, they want to look on a sheet and see, hey, there's two choices here, which one am I going to pick? So it validated the category to that degree as well. But those, 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 to that, to the company? Other than that it doesn't matter. Like how long does it take you to realize they, they usually can't kill you. Right. 95 times out of a hundred, I.

Think he, I think it really takes a year, like a year in the market to convince yourself that it's not going to happen. But, but I think that psychological 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 a hundred 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 do are there tells that you saw that maybe it 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. 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? 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. Ah. And once I, once they did that, I knew they weren't serious about it.

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

No. And then it didn't show up in Dreamforce.

Oh, it did show. Then you knew.

Yeah. And with Microsoft with the toe was when they're. But the features they were delivering were. You could tell that they weren't doing things for identity. They were doing things for Office365. So they were doing things to make.

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're going after the. Which I understand why Microsoft would do this too. They're 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 the Salesforce of Microsoft at 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 surf. 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 or 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. 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 doing a lot of things but nothing super deep. They're successful a lot with the services that are broad 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 niche, 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.

I'm being real, Jason. 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, 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 two or three 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 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 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 want to 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 four 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's pretty sensitive.

You knew the good ones.

Yeah. Yeah. And I. So, yeah. And I didn't want to piss off Salesforce because 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 didn't 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 two questions. I know we've gone long, but there was one great thing that came up and WeChat 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. 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 better or for worse. And it's like that feeling of. Is really. It's really empowering to people. It's. I know what's going on. In fact, with Okta, we did this in the early days and it. And we continue 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 the other day. So I think the magic quadrant we got the ma. The new magic, which is really magic quadrant is in our environment with enterprise buyers is 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. 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 spend this? 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 him 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. And 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 may 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 the company that is forthright and transparent and honest and they can trust with their security. So it's an important part of our brain.

I love the thing that you said, which is 99 times out of a hundred truths, 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 they're. People are gonna. Yeah, the truth resonates. And people. It gets especially now there's so much transparency online and buyers are discovering things and watching, talking to their peers and so forth. The more transparent and truthful you are, the more trust, trustworthy you can be perceived, the stronger your brand is gonna 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 tap, just handle it head on and 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 going to 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 going to know about it. Like for us, the people that look at the magic quadrant have already looked at it. They're not going to go look at it and see our position went down a little bit because I tweet about it.

Why don't we. There's more stuff I, 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 you think you can close a seven figure deal without getting on a jet.

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

All right, just two more and then we'll wrap it up because 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 so that I feel like I have more of that connection and it can be a more effective leader for those leaders. And that's the purpose of. 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 five years. I've probably done 500 of them. Yeah, I did veto one person, one out of five.

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 six, you had take more photos. You have to have gone. You have to have been a founder and gone at least five years, I think, to get this one. And like a little cheer to my eye came when I saw this. What does take more photo. I know what it means, but what does take more photos mean?

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. 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 many victories. Right. Don't. It's co. I know it's back to work the next day, but you've got to celebrate them, don't you? We almost all under celebrate the mini wins, don't we?

Yeah, yeah, yeah, yeah, yeah. It's 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.