Logan: An interesting thing I heard you say, which, um, was, I think there's lessons in any, uh, founder journey is sometimes you need to believe, even if you don't believe, is that a Tom McKinnon original?
Todd: It was a heartfelt, original, really a realization because before I started Okta, my, uh, the other jobs I had, I worked at a company called PeopleSoft, where I was an engineer, then a manager, and then I worked at a, at [00:01:00] Salesforce, where I ran engineering.
And it was much smaller back then, but in those jobs, if I worked hard and I was relatively good with good, good with people and focused, it's going to have some kind of success. These were established companies and pretty good customer bases, et cetera. But with Okta, it was the hardest part about it for me was that
Logan: to chance. Meaning,
Todd: there was so much to chance, meaning I could work as hard as possible.
I could do everything. Um, clinically perfect and it just might not work. And going through the journey, I think one of the really important things I learned how to do pretty quickly is
Logan: pretty quickly is
Todd: that so I could just aggressively focus on executing day to day, making forward progress, even logically in my engineering logical brain, I knew that the odds were against me.
And it was something I never had to deal with before. It was almost, it was definitely like a psychological, um,
Logan: had to [00:02:00] make
Todd: switch I had to make in myself to be able to keep executing so aggressively knowing that, you know, the odds are against you. There's a reason why so many startups fail. There's a reason why, uh, market winners get big and hold their market share.
And, you know, so
Logan: There's there's there's an interesting thing in that which is like a heavy is the head that wears the crown or something where you think When you're at a business and you have a defined scope of responsibility, there's some comfort in just the singular focus on, like, doing what's in front of you. And then when, if you didn't like something at Akka, you would have to, like, change it.
You don't just get to complain about it, uh, when you're the CEO or founder. It's like, no, no, you actually have to go fix the thing. You can complain,
Todd: can complain, but no
Logan: one cares.
Logan: So, when I was working at Salesforce, I was very decisive.
Todd: So when I was working at Salesforce, I was very [00:03:00] decisive.
I was quick to make decisions and pretty, uh, not ruthless, but decisive and went forward. And whether it was a personnel decision or whether it was a product decision or something like that, I've noticed. It was interesting when I started. Octa, after a couple of years, I noticed that my decision making had slowed down.
And I think it was, simple reason is that there was no, at Salesforce and at PeopleSoft, I had a boss. And ultimately, there was a check. And if I made the wrong decision, they could help me, or there was some kind of oversight, and I felt like there was a safety net, maybe. But at Octa, there was no safety net.
I realized that if I made a bad decision, It was going to be a bad decision. And, you know, I had obviously co founder and people working there and a board, but it's, it's kind of like decision making without a safety net. So I slowed down and I took more time and I was, you know, making sure that I didn't make some, make a decision to, in a too hasty manner and forget to, I really wanted to kind of like really think about all the angles and all the implications.
And I think in [00:04:00] especially small, small companies, That can feel uncomfortable sometimes, but it, it felt right for me to slow down a little bit.
Logan: companies, that can feel uncomfortable sometimes, but it felt right for me to slow down. Sort of thought about the speed of execution and decisioning while still being thoughtful.
Todd: Not super structured of a framework.
I would say though that, as I think back on that time, the, this maybe more, being more measured in my decision making, was married with a very strong culture of day to day execution, like my co founder and I, from the very first days and weeks we started working together, we had a list of what we had to get done that day.
So I think maybe the slowdown in decision making would be
Logan: you also
Todd: a big negative if you also didn't have that kind of that relentless day to day to do list, get something done. What do we do this week? What do we do next week? Because then it, maybe it could really slow you down. So we kind of, kind of had a check and balance with that [00:05:00] inertia and that execution
Logan: in the early days of a startup, the line between unemployment and being a founder can be a thin one if you don't create that, that urgency to get stuff done in a meaningful way.
Todd: I'm trying to think where that came from. Like, maybe it's just a personality trait, trait that I had and my co founder had, or has, still. Um, but, I just, I think it's just, uh, maybe part of it was filling in that void of a bigger organization around you.
So, if you take away the bigger organization, and you take away the administrative assistant, and you take away all the,
Logan: outwardly, outward appearances
Todd: outwardly, outward appearances of a company that's working and has customers and a bunch of employees, the only thing you have left is like, what did you get done today? And if you didn't get a bunch of stuff done today, guess what?
Nothing happened. So I think it was just from that urgency trying to fill in that void.
Logan: That's interesting. Did you? Um, it sounds like day to day. You obviously had to do list. Was there in the early days a, a, [00:06:00] um, a point in the future that you would work towards? Like was a month of the iteration cycles weekly, quarterly, yearly.
How did you sort of think about keeping your head off in the distance and moving forward?
Todd: Milestones, we wanted to have a paying live customer relatively early. And that took us, we were pretty fast on that actually. We got a seed round in June of 2009 and then we got We wanted to, by the end of that year, actually. So really I think it was in May of 2009.
So by six or seven months later, we wanted to have a live paying customer. So remember that as a milestone we met. And we actually, we got a 400 order right on Christmas Eve. I remember I was very proud of that.
Logan: our first. And, that's
Todd: Exactly. Corporation was our first customer at Okta. And that was a milestone. And then we also had milestones for, I remember we had a milestone for 50 customers.
So there were some milestones like that, but then on the product. The product development, I focused on product management, uh, you know, engineering, [00:07:00] to the degree there was engineering management required with only a small number of engineers, but we had, you know, we did like weekly sprints and agile processes at a, you know, pretty scheduled timeframe, but I think the big milestones were like raise money, get a customer live, hire some salespeople, those kind of milestones.
Logan: I, uh, I want to, I want to be the first kind of long form interview that you've ever done without talking about the PowerPoint that you
delivered to your wife. We said it's a, it's a, for people that haven't heard the story, Todd, uh, delivered a PowerPoint to his wife to convince her to go, uh, that you should start Octa.
I'm curious. Um, what. What was the core insight or thing that was, like, gnawing at you in the early days that sort of felt like, Hey, I've got to go leave a great job at Salesforce and
go pursue this?
Todd: I think there were a few different key things. One was it was, uh, I'm very, just personality wise. I'm very, uh, challenge driven. [00:08:00] Like I like things that are challenging and, um, makes me feel like I'm accomplishing something and it makes me feel like I'm, uh, you know, living up to potential and so forth.
So I think starting a company was just a personal goal I had. I wanted to do it, which is not. Always the best path to success to start a company. So it was partly that, but it was, I would say a significant part of it too was
Logan: too was,
Todd: at being at Salesforce, I saw what it was like to operate in the mode of cloud computing from, you know, Salesforce, we would have, we were, by the time I left to start Okta, we were coming up on a billion dollars of revenue.
And we would have these management offsites where we would go two days and there wasn't, uh, There was no section on competition, which is pretty strange. Usually you have a competitive team that comes in and talks about what's the competition doing. What the re the realization I had was that there was no competition because it was so disruptive.
You know, Siebel really couldn't [00:09:00] compete and all the other software companies, Oracle, it was such a disruptive technology model and business model. And. Just thinking through it as like, if you're going to go start a company, that type of disruptive technology wave is the best time to do it.
Logan: do it. And you
Todd: And you also saw at the time that it wasn't just the application layer in 2007, 2008.
It was also the kind of the core birthright IT application like email. Google was doing Google apps for domains and you saw that was really going to be a cloud service. People were going to run their own exchange servers. You could tell that was going to go to the cloud. And then the big thing too was
Logan: have in
Todd: the success that Amazon started to have in the early days with Amazon Web Services.
So then you have three layers. You have business applications, you have birthright IT collaboration applications, and you have IT infrastructure. So in that context, inside of Salesforce at that time, it didn't take a genius to figure out that this was going to be a big wave and there were going to be disruptive opportunities.
So personal ambition, uh, this, [00:10:00] knowing that if there was ever a fertile ground to do it, it was going to be in the next few years for me. And so that was really the genesis. And then it was, and it was a lot of work and iteration to actually find out or actually figure out a product that would be valuable to companies or customers, or we could make money selling in the short term, but also something that could build a big company over, over time.
So that, that's kind of how we
Logan: You, you, we reference salesforce. Um, but before that you alluded to PeopleSoft, which is probably most people probably don't know that business that are listening at this point. They're probably aware of workday. Dave and, uh, Neil's next next act. And there was a nexus of talent at PeopleSoft as well as like a unique culture.
Peter Gassner was there as well, who I, uh, CEO of Viva. Um, um, I'm curious, like from the growing up and it was maybe the definitive client server application business, or at least on a very short list of them. And then you went to the definitive, at least [00:11:00] first generation cloud cloud company.
Todd: Um,
Logan: The PeopleSoft experience.
Was there anything that that you particularly took away from that journey that that you wanted to instill within Octus culture in a meaningful way?
Todd: Hugely impactful. It was my first job out of college. I was there for eight years. And as listeners know that your first job is super impactful. So it's all kinds of examples for you and you meet mentors and it's very, it leaves a big impression. For me, it was a few things. The thing, probably the biggest impression was, Dave Duffield, the founder of PeopleSoft, who's, it was actually his second HR software company.
So Workday is actually the third. There was, uh, Integral Software, which is mainframes, and then PeopleSoft, which was client server, and then Workday, which was cloud. So
Logan: You just kept running it
Todd: it's like pretty smart, right? Um, amazing run of success.
Logan: Now he's doing something. Now he has another company
Todd: Yeah, it's not, it's not HR software though. Yeah.
Logan: maybe there'll be an AI HR
Todd: Yeah, exactly. Uh, AI [00:12:00] agent, uh, HR software probably coming out soon.
The, so he and the team there, management team there at the time did a really good job of making it feel like the employee's company. And I just remember that feeling like, this is my company. You know, um as hard as I work and as smart as I am and as good of a teammate as I am And how much I dedicate myself It's i'm gonna advance and grow and be rewarded.
It's it felt like You know, the team was super strong and everyone was aligned on that that feeling I thought was For me was incredibly motivating and really powerful and something that at Okta, I've really tried hard to create that. Um, and there's a lot of things you do to try to create that, but it's almost the most important thing you do is I think how the leadership team and how the founder acts.
Um, and if, you know, if you're kind of giving credit to other people and, um, making sure that there's, people are kind of [00:13:00] maybe trusted with more than maybe they should be expected to handle at any given time, asking people to step up, pushing people, whatever you can do to try to make it feel like it's theirs.
I never wanted it to feel like it was my company, and I'm the founder, I'm the CEO, and it's my company, and you can work here at my honor. It's like, no, I want it to feel like your company, and that is empowering, and it's makes, it's like, uh, it's not altruistic. It's, it's, it's like, I think it's the best way to win.
If you have a team of people that are really working their ass off for their thing, and trying to
Logan: ambitions through the
Todd: further their own ambitions through the company, I think that's very powerful. We
Logan: in picking, I guess you and your co founder, Freddie, you guys worked together at Salesforce, but didn't work super close. Is that is that a fair
Todd: was, uh, Did partnerships and sales and business development. I was on the engineering side.
So a couple of little acquisitions we [00:14:00] did We worked together on that and just it was a pretty small company at the time in 2003 freddy started before he started in 2002. I was I think employee 400 or something at salesforce And it was pretty small company. So just socially we got to know each other
Logan: few left the
Todd: yeah, when I, after I left to start, to start Okta, he left a year before and come back to get his MBA.
And then the key thing for, you know, the advice I talk to people that are thinking about starting a company is, You probably don't want to start a company with your family or your best friends. Cause it's gonna be pretty hard. But you also don't want to start a company with someone you, uh, you have to be able to get a really good reference on them.
And we knew each other a little bit, but we also knew a lot of the same people that knew us both really well. So it was really the best of both worlds. It was super strong references that vouched for us and, um, comfortable with each other and it worked out really well.
Logan: How did you, um, besides referencing each other, did you guys identify a problem that you both uniquely have passion for? Do you [00:15:00] guys do trust falls to build like go on a ropes course or something? Like, how did you guys build that initial trust and start working together?
Todd: We were both passionate about this move to the cloud and helping companies adopt it. And then after that it was just a process to talk to. We had an original idea, which was kind of like systems management for a cloud world.
Kind of like some similar to like New Relic or. AppDynamics, but more from a company that had a bunch of SaaS applications. Didn't, we talked to a bunch of people, tried to get feedback on it. The feedback was kind of mixed and lukewarm. And it was through those conversations. We really got excited about the identity management idea, which is what Okta became.
But it was just working together through that process. And then, you know, we went out to dinner, we went out, we went out to dinner with my wife at the time. Fiance at the time who later he got married to. And, you know, that was really important to us that there was some level of comfort with the spouses.[00:16:00]
Um, but yeah, just, we were lucky. It just clicked. It clicked right from the start. The, I think it helped that, um, it helped that we were, for some reason, we're both super competitive, but not with each other. I think a lot of founders get in trouble because they have that drive and that competition, but it gets turned.
Against each other in cases, especially when times get hard and for whatever reason, um, we never really, it was never like a Competition between the two of us. It was always that drive was focused on that day to day execution and making the company successful
Logan: In building the nucleus of what, um, the initial company kind of was, I heard a reflection from you at one point that maybe, um, some of the first 10 hires didn't work out or weren't maybe as deliberate as you were with, with your initial co founder.
Was there any reflections on, um, how that came to be? And, you know, as you think about the initial hiring, like what the what you would
Todd: as you think [00:17:00] about the initial hiring, like, what the, what, what you would have done differently? that led to some of the early decisions we made around people were pretty, um, a little hasty. They were, the people were good and they helped us, but I feel like looking back on it after a few years, I feel like if we would have been maybe a little bit more careful and slower on hiring, we probably would have gotten more done in the first three years than we ended up doing.
Um, because we made progress pretty fast in the first year, but then we had to rework some stuff and, um, It's probably better to maybe take a little bit more time,
Logan: I've, I've read
Todd: it's easy to say
Logan: say no
Todd: you're so, I mean, you're, you're, at the time, you're like, are we going to survive? Is this even going to work?
We need someone here to start writing code and building stuff. We know we have to do this. But a few years out, that was my reflection on it.
Logan: Yeah, there's some survivorship bias probably on, you know,
Todd: Yeah, exactly.[00:18:00]
Logan: is a requisite for having those
Todd: problems, Yeah, exactly, exactly. I
Logan: I've heard a reflection from you, uh, that I think I agree with about just, um, markets and tailwinds and sort of the market insight being maybe the most important thing.
Can you, can you share your reflections on that and how you think about it? Yeah, The
Todd: the market matters a lot. I would say also the timing of the market. So you have to get a, you have to thread a couple needles, right? One is. You have to pick the right problem to solve and it has to be something that is
Logan: relatively immature solution, by
Todd: a
Relatively immature solution by definition will come from a startup because startup hasn't been working on it for 10 years so that will be good enough to get people to invest in the solution or use the product or So it has to be useful in the short term But we all, well, most of us want to build something big and impactful over the long term.
So then the second [00:19:00] needle you have to thread is it actually has to have be something that can grow into something big and impactful. And for me, I had a, my experience actually at,
at PeopleSoft where I built a product of PeopleSoft that was kind of similar to Okta. It was hooking up the HR system to an LDAP directory and that product customers really liked it.
And I got a sense that They could really make it part of their IT infrastructure and it would be an important thing that they would invest in for many, many years. So it was kind of the, for Okta, it was like people were talking to customers and they said, yeah, you know, this, we're moving apps to the cloud and
Logan: had Exchange on premise, and
Todd: It worked great when we had exchange on premise and all my Windows PCs could connect to it with no login.
It was really good. But now we're doing box and we're doing Google apps. It doesn't work very well. Can you just solve that problem today? So that was the short term pain people would pay for and people would want to solve. And it was a [00:20:00] with the shifting technology landscape. It was an important thing to fix.
But then also, uh, To build that, which seems pretty simple, you have to build all this infrastructure, directory services, and replication technology, and I knew that those were the underpinnings of something that big companies would want to buy, and it could be part of their technology landscape for a long time.
Logan: There's this irony in this in the reflection you said about the two things, um, uh, or the two different like market dynamics that need to exist that that you almost need by definition have a very small market initially because if it were a big market, someone probably would have already solved it. But you want like a very fast growing small market because that's the only way to make big outcomes.
And so the
Todd: yeah. Like I was at, we were in the Florida Keys last spring break, I'll never forget I was with my kids and there was this pelican that was trying to eat this massive fish and it was like, there's no way it's gonna get that fish in its peak
Logan: Yeah, yeah, that's right. Sometimes
Todd: people stop trying, you're not gonna be able to eat
Logan: in and pitch, uh, huge [00:21:00] ideas, right? Um, but there's no, uh, disruptive means of pursuing those in some way.
There's no chasm that's opening up and you get to cross it uniquely. And I think that, uh, Big markets are almost, um, it's like a fool's gold in pursuing, because I imagine your TAM initially was, I don't know, a couple million bucks or something, right? By definitionally, but it was on the path of being hundreds and then billions and then tens of billions.
Todd: Oh yeah, we, we've, um, we, we heard that, uh, the market Okta was going after wasn't big enough. We heard that, you know, I think we still heard it like six months ago.
Logan: I'm Sure.
Todd: Yeah. So it's, it reminds me of another important thing from the early days, which, which is
Logan: it's too early, you're too
Todd: you, you are, if you don't feel like it's too early.
Logan: belief and just
Todd: You're too late.
Logan: hard for
Todd: But also, being perfect timing [00:22:00] feels way too early. So that's why you have to suspend belief and just go. And that's what's really hard for people. It's like, they want to mitigate risk and they want to like, do a bunch of research to figure out if this is the right idea. But the reality is, you're not going to know.
Because if, you know, if it's too early, you're not going to know. And if it's too late, If it's too comfortable and you've mitigated all the risk and you see, oh, people were really buy it. There's all six other companies doing it. Then it's too late
Logan: Yeah, by definition, you
Todd: it's
Logan: improbable. He started on the exact day, the exact right day. And so your job in some ways is to start too early and survive until the market gets to
Todd: And for us, it was, we, we built the first product and we had a Had a, had a customer, you know, paying customer and the next, this like the second year, like the second full year or no, the third full year we were doing this the third full year was really hard because we [00:23:00] were, we'd been doing it for like two and a half years, raised money and it's like, all right, where's the, where are the sales?
You know, you should be rolling. It's been two and a half years. You have this team of 15, 20 people now, where's all the success. But the reality was it was still too early.
Logan: reality was, it
Todd: It was still true. There weren't enough cloud apps and companies maybe had a few, but you know, this whole identity thing they're going to put in and spend a bunch of money for like three caught ups, maybe not enough.
And we just basically had to hang on for, for us relatively short amount. It seemed like a long time, but it was relatively short amount of time. It's like three quarters. And then I remember, I'll never forget the third quarter of 2011.
Logan: the third quarter
Todd: So what is that exactly? 13 years ago in 2011, it was like all of a sudden, um,
Logan: a sudden, it
Todd: it just worked in the quarter, and there was a bunch of sales.
And I'm not talking like millions of dollars, I'm talking like the target was 200 grand and we did 280 grand. But that just felt like the dam broke open and the water was flowing. Because there was enough, you know, enough, like, the [00:24:00] market caught up to
Logan: cost. So there wasn't, I assume, like a seminal thing that happened. But instead it was like chopping the tree and you don't know which chop knocked it over. You sort of got the market met the density of what you guys had built.
Todd: Yeah, and it was, you know, it was in stages, right? Because like I said, it was 200, 200, 280 grand . But then after that it just seemed, it was,
Logan: call it that, you
Todd: there was enough opportunity there every quarter, every year. And um, it felt much different than that.
I call it that, you know, that. That time that, you know, relatively short amount of time, but Three quarters in the desert there where we'd been doing it long enough to have some expectations, but not so long that it was The market was really ready felt like a long time. But for those companies out there that are in that valley Hang on keep going survive
Logan: and so, so what would you if you were asking yourself, um, if you're in that and there's, there's a balance between the, the delusion of, of just, you know, it's almost there. It's almost there. It's going to [00:25:00] happen. Uh, you know, In the reality of maybe, maybe not is, is there something that you would ask yourself?
Um, if you are in what feels you're not sure if it's we're waiting for a moment in time versus, uh, maybe you're just banging your head against the wall.
Todd: Oh, that's the 64, 000 question because for us, and I think for a lot of companies, it's the only thing that the only reason, you know, is because it happens. The early indicators aren't super clear. So in other words, the reason I knew that that quarter in 2011 Q3 was gonna be good was because it was good.
It wasn't like, I mean, two months before that it was pretty rocky. We had to, we were trying to close our Series B and we totally whiffed the previous quarter and Thank God that David Wyden from Coastal Ventures agreed to still lead the V
Logan: do it.
Todd: because the round got done. And, but there was not like, uh, tons of signal that that next quarter [00:26:00] was going to be the tipping point.
So I think it's hard. I mean,
Logan: down to maybe
Todd: you gotta, you have to, ultimately it comes down to
Logan: metrics, but it
Todd: maybe not even depending on the business, maybe not even financial metrics, but it comes down to like true customer value and, and sussing out what is. True customer usage and true customer value versus all the things that might seem like that but aren't really true.
For us it was relatively easy because people were paying for it and using it and there was adoption. But I can imagine other businesses, the only thing that's really going to tell you is true customer value.
Logan: Is there an element of, of fulfillment in the process that you enjoy the, the most about building a company? Because I think
Todd: sometimes
Logan: we, we, we, we lionize or we hold in too high regard fundraising or an IPO or valuations or hiring or whatever the numbers are. It's almost like you need to find the beauty in the process in some ways, because there's always a new [00:27:00] number to hit or something.
Todd: I mean, for me, personally, I love the challenge. I love the, the, the, the, uh, Oh, that can't be done. Oh, it's a single sign on company. You can never build a big company on a single sign on. Oh, Microsoft is going to crush you. I remember when Microsoft launched their competitive product in 2014, it was going, you know, it was going to crush us and going to put us out of business.
And it's like, what is that 10 years running 10, 10 years in a row, still not crushed. So the challenge and the, in the overcoming challenge and. getting, um, continuing to grow and have success and innovate. Probably the thing that I wouldn't have expected as much 10 years ago was it's, it's been super satisfying to see people at Okta grow and, um, take on more responsibility and even as painful as it is to leave and go to other companies where they're successful.
I always tell everyone I get [00:28:00] pissed off when they leave, but the reality is I'm super proud of them. And I love seeing that success. I mean, junior people that start off entry level and go on to run sales at other companies or go on to be CEOs at other companies, um, startups, CEOs, it's incredibly satisfying.
One of the things
Logan: that, um, I, I always, uh, try to say, but it sounds very self serving when I, when I say, um, uh, dilution or valuations or whatever are, are markers along the journey and art means to me.
To an end in some ways and I've heard you talk about reflections on How at one point some of those things felt more important than they do today Can you share maybe i'll clip this and send it to people when we're negotiating over, you know, 10 here or there but
Todd: well. I wish I owned 100 percent of Okta
Logan: Yes, yeah I can imagine yeah,
Todd: imagine. Talk about, what was it, survivor's
Logan: Yes, yeah
Todd: exactly. You catch
Logan: you've had some good board members
Todd: notes.
Yeah, exactly. I [00:29:00] wish I had, I never sold a share. I knew everything was going to work out. I found continued success, or I found a continue over and over again. Maybe, uh, giving a little bit on funding rounds, even on the IPO. I mean, we went public, I remember. on the roadshow, we had enough demand for, um, to price, you know, like probably price the deal at 19 a share.
And we had a big meeting and it's like,
Logan: can probably get 19 a
Todd: we could probably get 19 a share. Let's do that. And I made the decision. I said, we're going to do S 17 a share
just because I feel like we're all these investors are going to be partners for a long time. And I feel like if we Give a little now it's going to help build that long term relationship.
We're not in this for whatever the 2 a share, I think would have been, um, you know, [00:30:00] millions and millions of dollars, but it wouldn't have been better to start the relationship off on the right foot with these long term shareholders. And other funding rounds, it was the same way. It's like, um, let other partners into the deal, a little bit more dilution.
Um, you know, it's probably good to have more money and we get great people at the table. So it's kind of like long term thinking or trying to make sure that you're You know, these are long term relationships and you want these people to help you and you want them to feel like you were a good partner from the start.
It's worked pretty well.
Logan: start.
It's worked pretty well.
Logan: thousands of people at this point, um, even I guess Multiple thousands if you go back to PeopleSoft and Salesforce as well um I'm curious about interview questions and I've heard you say Things about teasing out motivations when trying to get people, uh, or figure out like why they they want to join a particular company Um, can you speak to that and and how you think?[00:31:00]
Testing out motivations can lead to Potential success or problems within an organization.
Todd: my, I think when I interview people, I really try to focus, focus on why they made decisions in their career, why they went places, you know, and obviously like it, it, it kind of gives you an insight or an idea of what they're looking for now.
Is that what you need? Is that going to make them successful now at Okta? But I also try to figure out, you know, history is the best. So you can try to assess someone. You can try to say, Oh, I'm going to judge, I'm going to test this person. I'm going to ask them questions. I'm going to see how quick they are on their feet.
But it's probably, it's very unlikely that you're going to be able to assess them better than their previous companies and managers could. So I try to figure out what tasks and what projects they got put on. And did they get more responsibility? Was it in a key area for the company? So I'm really trying to get for that, you know.
So you went to this company, you were there four years. What did you go in as? How did you, [00:32:00] what, uh, what, you know, did you, how did the orgs change? Did you get more responsibility? Did you pro what projects did you put on? Was that project important for that company at that time? Or were you kind of a sideshow?
So let the, let the people that have managed that person, let the companies that have hired that person and promoted that person and assigned work to them, let them tell you. how good they are. And if you see, I mean, you really have to, you can, you know, I got it. You're really trying to get a great person.
And if you see them, they've been working at great companies, but maybe it wasn't that long and maybe they didn't get put on the most important things. You really have to ask a question like,
Logan: You really
Todd: you're going to basically overrule
their managers and the leadership of those companies. It's probably not, the odds are probably not in your favor to, to, to come out ahead
Logan: Well, that leads to the reference checking, and I guess, I mean, it's amazing how uh, how many people don't Do it when making hires and I'm sure there's a bunch of people that have worked at Okta that you've interacted with and they've gone [00:33:00] on to other organizations and subsequent people didn't didn't check with you or your
Todd: yeah. How often people don't call me.
Logan: It's, it's, it's pretty wild that people don't do that. I'm curious what you've learned about when you're talking to someone for a reference and trying to tease out the key characteristics that are there questions that you tend to ask or things you tend to do.
Todd: well, I think do it
Yes. That's the first. It's something easy. It's easy to, uh, it's easy to get really excited about a person and, and, and not be rigorous about doing it. But
Logan: sheet, off sheet, sort of triangulate in on.
Todd: I have multiple, yeah, I mean, you gotta make a decision maybe about the importance of the role and. how long it's going to take or how, what kind of references you can get to, but more important, the role that you got to really, and especially if you're, let's say you're going through the resume and talking about their experience.
And there's one thing in their experience where they were at this company and they got put on an [00:34:00] important project that was very applicable to, um, what they might do at your company. That's the reference you need to check. So it's almost like the, the first conversations and the background checking is like a, a map that shows, tells you where to focus with the references.
And then the references are like, okay, so so and so is at this company. Tell me about this project. Like, was it really as important as I thought? And did it go as well as it seems? And was this person involved? Like I think they were, and you get that from a reference. It's like, you're doing pretty good at that point.
Logan: I think they were? And you get that from the reference, it's like, you're doing pretty good at that point. I called
Todd: to I, I called a, I checked a reference once and Uh, I, you know, I said, I said, okay, we're talking to this person. You worked with, you worked with this person here.
Was this person good? Oh yeah, they were good. You know, really enjoyed working with them. Yes, they did this. And um, I said, all right, thank you very much. Hung up the phone. And then five minutes later [00:35:00] my phone rang and it was a woman I worked with at Salesforce and hadn't talked to her in years. And
Logan: she said, Todd.
Todd: she said, Todd, I said, Hey, how's it going?
And she goes, I just gotta tell you that, um, I have an office next to the person you just talked to. That you were checking the reference on. Or the person that was giving you the reference. And this person came into my office and said, I feel so bad, I just totally lied to Todd about this reference. You know, I just felt bad, you know, it's like, I didn't want to say a bad thing about this person.
So yeah, you gotta like, There's a reason, like there's a bias to be positive and no one likes to blow people up. And, um, I, I think you, what I've, one, one thing I've done is like, what are they, what is one thing they're just best in the world at now? Very few people are the best in the world at anything, but that should get to a strength that should get to a, you know, Oh, the team loves them or, Oh, you know, they're really good at [00:36:00] crisis management.
And so try to try to get the person to say. Something they're amazing about, because it's pretty unlikely that, or if they're going to really, uh, be negative on the reference, if that's going to come out, they're probably going to do that pretty directly. Right. If they're not, and if they're just going to not be direct about that, then the next best thing you can probably do is see that there's a lack of.
a super positive strength. And if there's a lot, because it's easy for someone that's going to be negative on a ref or doesn't want to be negative on a reference because they don't want to blow someone up, but they want to do the reference.
Logan: to do the reference.
It
Todd: It would be, it would be for, they would figure out a way to say, you know, yeah, they were kind of just okay.
A lot of stuff, you know, they're good. I liked working with them. They're probably not going to be like that. They were the best in the world at crisis management under fire. They were the best I've ever seen.
Logan: In pinning people down, the best is a great way of framing it. Um, the other ones I've heard is like, you know, were they top 10? [00:37:00] 5 percent or 10 percent of people that you've ever worked with in this
capacity and some giving people some barometer and and then they react Oh, you know, they weren't let me think like I've worked with 40 people.
They weren't top 5 percent But you know what? They were probably top 50 and then you know okay, then at least you're calibrated in some way where you've moved beyond the platitudes or the the general descriptors and now you're forcing them to rank which You For whatever reason, it doesn't feel as bad as saying something negative to
Todd: someone,
For sure, I think that's right on. When people call me for references, one thing I do is if the people that I think are awesome, I tell the person calling me right away, hire this person. They're awesome. That's the first thing I say in the reference call. I don't screw around. Like, I don't say like, Okay, tell me, ask your questions.
I'd be like, You gotta hire this person. If you don't hire this person, you're crazy.
Logan: Because at the end of the day, that's what
they're
Todd: Yeah, if you call me for a reference and I don't say that,
Logan: Yeah, there's an implicit thing in.
Todd: I've set the [00:38:00] bar with everyone
now.
Logan: Yeah,
Todd: exactly.
Logan: The negative one is also interesting where, um, forcing people to frame, Hey, if this doesn't work out, what in three years I call you and say, thank you for the reference.
But uh, you know, it was really appreciated, but it didn't work out with X, Y, Z person. There's something to that, that forces a tangibleness in someone's mind of like, okay, what, what What reason would it be? And then you're getting to their weaknesses in some way, and that feels, whatever reason, softer, in some ways, of getting people to say that,
Todd: Yeah. And I also, I don't think it's, the other thing on this one is I don't think like a one non raving reference is a veto.
So many people I've hired that I've talked to four or five people, and maybe there are a couple ones that were not raving, but I got to one raving. Give me one.
Logan: one. Also, I'm sure you found this. everyone's going to be amazing at all things. And so you need to calibrate what that person's strength that are with the particular role at which you're hiring them into. I, one of the, I forget, maybe [00:39:00] this is a Peter Thielism or someone like that, but like they've always said, Brian Chesky couldn't be the CEO of Tesla and Elon Musk couldn't be the CEO of Airbnb, which I think is an interesting sort of
Todd: they originally said of Twitter, but then they had to change it.
Logan: It's probably right. Yeah, it turns out.
Todd: I take that back. Edit that out of the
Logan: Yeah. Well, it turns out he actually couldn't be the CEO of Twitter. Uh, but,
Todd: but Nice one, nice one,
Logan: yes, I said that I thought, uh, one of the things I've also thought, um, in building a journey or in the journey and working with, um, uh, board members, um, is, uh, just expectations setting with them and what to use them for.
Them for and obviously Uh as much as I hold all vcs in the highest regard as you know doing really god's work out there Um, we're not always going to be Have the full context of the business and not living the day to day and so you get really a breadth of perspective But not the depth in there How did you go [00:40:00] about figuring out what what was the right context to provide with?
the investors or the independent board members and You Taking that feedback, not as gospel, but as an input into decisioning.
Todd: Well, one of, in early times at Okta, one of the mistakes I made is I was too passive with the board. I would go into the board and say, here are a couple things that are going on.
What do you guys think? Which felt. Okay, because it was early and we did have a lot of questions to answer, and maybe we didn't have a lot of answers. But that was wrong. That was not effective. Because as the CEO of a company, the board members know that there's a lot to figure out. They want someone that's going to figure it out or try.
Not someone that's going to have a brainstorming session with them about what we should be doing.
Todd: So I think that, tone change of, here's what we're doing. Here's the decision. Here's the thought process that went into it. Here are some things that could go wrong, [00:41:00] could go right. And here's some ideas about the future and how we could pivot.
That's very different than saying we have these challenges. What does everyone think? So that was a big, big shift for me that helped with the board in the early on. That's very early on though. It's changed over
Logan: Yeah, I guess implicitly sort of forces, um, action or forces them to raise their hand if they disagree without impeding
Todd: you in trying to make progress.
Yeah. Yeah, exactly. And it's, and it just, you know, gives them confidence that someone's got the wheel. Which, in the early days, that's, those things are un, not totally figured out. That's valuable.
Logan: you gotten more as the business is scaled? Um, how do you maintain what altitude to talk to the board members about?
Todd: I think one of the things that happens over the years is you, you have to get pretty effective at giving them context. So, and different companies do this different ways. There's data packs, you know, like the whole spreadsheets get sent out and the whole [00:42:00] Pre read for meetings.
There's the letter. There's the board memo. And all those are good, but I found that you have to work pretty hard to keep that context current and, and it takes, the board members have to absorb it and grok it and work to make sure they're up to speed. But if you provide that context, you're going to get much more valuable insight on the challenges and more strategic input versus spending all the conversations just educating them.
And I found the most successful, or the most Helpful conversations and the most valuable input has come from when we've done a good job of getting them context on an issue so they're not trying to come up to speed and, and have a strategic input on the issue all in the same time.
Logan: Hmm. That's interesting. And, um, I guess as, as the relationship, as you've grown into a public business, um, how has the, uh, how has the dynamic in working with investors maybe changed? Have you started to build a, um, a, a cast of people that you go to for different things [00:43:00] or is it sort of stayed consistent
Todd: go to for different things, or has it sort of stayed consistent personality?
Todd: One thing that changes, obviously, well, maybe not obvious, but when you go public, there's, there's a, a really a, uh, the governance part of it becomes more of the board's function.
Um, audit committee, nominating gov, no, no, nominations and governance committee, et cetera. Uh, in the early days, it's very different. Most of the, most of it's about, like, making the company work and grow and be successful. Um, I've found that because, I think partly because of that, um, the, the network of.
other like stage CEOs is very valuable. Um, just bouncing ideas off people that are similar size and stage as you probably at some form in some form encountering the same challenges. And that's [00:44:00] the beyond just the board and just personal mentors I have or personal relationships. I have other CEOs of companies the same size and stage.
I've also worked, uh, I'm in some CEO groups and some organizations with, um, CEOs of much bigger companies, like Fortune 500 companies, and
Logan: have a different
Todd: have a different set of challenges, so you can learn stuff from them, and it's valuable, and smart people are smart people, but there's something about, you know, talking to CEOs of companies that are about the same employee size, about the same revenue, same growth challenges, same business model.
It's really valuable.
Logan: From an operating standpoint, as you, as you may reflect on the founding journey or from being, you know, the two of you in the early days to where you are today, is there anything that stands out of you wish you could have told yourself way back when, like when it was just the two of you? Yeah, yeah, it will go up.
Anything [00:45:00] operating wise, uh, any, anything with regard to managing
Todd: managing people? Yeah, no, it's, uh, there's a couple things that pop out. One is that even, so I think there, I had, I made the mistake, or I had notions for some reason that once we were a real company, uh, and that can be defined as different sizes as we grew, right?
Todd: First it was a real company and we had a customer, and then it was like when we got to a certain revenue, and then it was when we went public and The advice I'd give myself is, you have good instincts and you should trust your instincts, even if you may be at a size and scale now where before you thought you might have to stop trusting your instincts.
So, um, I think that's one of the things I would tell myself, you know, I, you know, you kinda, you're one of the challenging things and something I'm very proud of is my ability to, um, be effective at different sizes and scales and stages. And I think To do that, I think you have to understand that it's different and changing, and there's different challenges and different requirements.[00:46:00]
Um, but I think I maybe underestimated my, my instincts being valuable at different stages, and that's one piece of advice I give myself. I think when people, like when, I think, I think I hear this, when I hear founder mode, this is my interpretation of it. I hear other people, that's what I hear when people say, I'm going founder mode.
I feel like they're saying the same thing I'm saying now, which is Trust your instincts, even if you might be a company that's much bigger than you were five, 10 years ago, your instincts are probably pretty good. Still.
Logan: Founder mode's good branding.
Todd: Yeah.
Logan: Trust your instincts. Doesn't isn't that quite as buzzy
Todd: It's also good when your Job is to attract founders. It's
Logan: It's great branding. Uh, yeah, I, uh, I, I totally agree with that. Um, in terms of, I guess, making sure to, to your point on, on trusting instincts, is there anything you've done tactically to, to, Maintain, uh, information, be it skip levels, or on the [00:47:00] ground, what's actually going on, so you're not getting managed up to, which I'm sure is inevitable from a scale standpoint where you are today.
Todd: a very powerful phenomenon. Yeah, you get people present what they think you want to hear.
Todd: And I think there's a few things that help break out of that. echo chamber or that, whatever that, whatever that, you know, that prism. One is just trusted relationships of people that have been around a long time and you can rely on to give you the truth about what's going on in a certain area.
You can build those over time.
Logan: those over time. I
Todd: I found also that, and this is not just for myself, but also for my leadership team, Um, You have to have a competency of, or, uh, um, an ability and a, and a drive to f to know the details. I think if you have a, a leader or a leadership team that doesn't have a drive to know the details, they're more susceptible to this.
Because when [00:48:00] things are being presented to you in a certain way, or your information is getting filtered so it comes at you in a certain way, if you don't know the details, Or at least at some level, or don't dig in in some areas, you don't have a reality check against that. But if you talk to enough customers, if you know how the details of a product works, if you know more things about a process or about a challenge or about how employees are feeling, it's more likely that you're going to be able to have a good contrast with what you're being presented and be able to call BS on it in the right time.
So I think that is, that's very valuable. The other thing I like to do, which is you, you gotta, the ceremonies of the presentations and the status reviews and the, the meetings, you gotta, you gotta shake them up. Like,
Logan: up. Like,
Todd: you know, you know, okay, there's a 17 page deck we're going to go over. So just, you know, something's in there.
Ask about that first. and get the, get the [00:49:00] conversation shaken up a little bit from what they thought they were going to have. And it gets people, sometimes it can be unnerving for the team that prepped and, but I think it's people that are passionate about what they're presenting, are comfortable with what they've done, and they understand it well, they're going to be more capable of, of being free form and going off the script.
And they're going to be okay with it and you're going to probably get a better sense of the people that are really comfortable with it and deeply understand it and get a better insight into what's being presented than if you just follow the script and got the pitch as it was designed to do. Now I think my team probably, it, it, it,
Logan: probably annoys them. I'm sure. Yeah. That they.
Todd: because they did all this prep and, you know, and a lot of times, you know, I try to do this and they're like, if you just want to let me do the first three slides, I would have told you all these questions, but, and then I'll begrudgingly go say, okay, give me, give me the first three sides.
That's what I'm trying to do. I want, I want, um, I want truth and sometimes a well crafted [00:50:00] presentation is good, but I think more often than not, uh, an open discussion, candid discussion about. The issue or the, what you're trying to decide is better than a pre canned presentation about it.
Logan: because you can't, you can't fake depth on , on understanding or something.
You can't. Like you, you can, you can rehearse a presentation, but the what's below the waterline or the iceberg, uh, you know, picture or whatever it is, you can't fake that. Yeah.
Todd: especially if it's a, especially if it's like a hard call. The depth is important because. You want to, if you're going to try to, as a leader, if you're going to try to come down on the right side of a hard call, you probably have to get to the things on the margin that are swaying the call either way.
And I think you can explore those best with people that can
Logan: you.
Todd: in depth about the thinking about the [00:51:00] issue.
Logan: How do you think about the, the slope of the line of people within the organization and the balance between hiring for.
Experience and people that have been there done that versus, um, maybe people that have been on the journey with you for a while, and it's unclear if they can continue to scale in the trade off between
Todd: them.
Well, I can tell you that being a founder has made me much more, uh, loyal to people. Sounds like I wasn't loyal. I was loyal. But, my mean is like, you know. Wanting to keep, keep, keep someone in a role they've been in for a long time, they've done such a good job for the company, wanting to promote from within, wanting to reward people for a long period of work, even though they might not be the right person for the next couple years, I'm much more apt to do that than I would have been before.
Just, you know, you go through the war with people, and you kind of feel like you owe them, and you know what they did to get you here, and you feel, even sometimes, honestly, like it's probably not the best decision, but I feel like [00:52:00] Um, I, I err on the side much more of, of being loyal. The, the um,
Logan: but
Todd: but that being said, one thing that really resonates with me is, is people that can think about opportunities and problems and challenges and the right solution based on empirically or from first principles what we need now or what we'll need over the next couple years.
I don't want to hear as much about, yeah, it's fine if you want to bring your past experience and things from previous roles and previous companies and previous industries to inform your analysis of this, but don't give me the, the repetition of what worked before and don't, you know, not everything is a, just, you know, if all you have is a hammer, not everything is a nail.
Let's bring some thought and some insight into why it might be different. So, with me, it's like, I'm much more likely to agree and be swayed by your case or your arguments if. You can make a logical, well presented argument on why we should go a [00:53:00] certain direction versus like, you know, I've seen this work before, this is how this other company does it.
Logan: You've described, um, innovation as inherently lonely in some ways.
And the people are going to question if the ideas work, how big is the TAM, the path and all that. Has there been, um, obviously success is probably validating of the, the journey. But as you look out now in your public business and probably have had more success than you
Todd: and probably have had more success than you originally thought you'd have.
You've
Logan: that Oculus would be worth 100, 000. Yeah, you know, like a few years. Because if I was still doing this after a few years, you know, that would mean that it was
Todd: Be okay that I quit my
Logan: It would be
Todd: Not cash out, just be okay. Yeah. Be okay that I quit my job. So yeah, that was the upside.
Logan: would [00:54:00] be okay that I quit my job. Yeah, that would be upside. The next thing along the way, uh, in dealing with the inherent loneliness of, of innovation in some way and just having people shoot spitballs on your idea. Um, is there anything that you've, um, that you take solace in beyond success or is someone else that's along this journey right now that's being doubted?
Anything that was particularly helpful for you?
Todd: pretty helpful for you? I mean, it's possible. Yeah, you can succeed. That's that's what's comforting. That was that's what I mean. Just tell me there's a chance. That's what's got to keep you going. And if the only time you should quit is if you're pretty sure there is no chance.
Logan: should quit
Todd: That's kind of the ultimate decision you have to make there.
Logan: no chance. That's kind of the ultimate decision you have to make there.
Extremely, you know, doubted and people skeptical around it and then maybe [00:55:00] disruptor innovator in some way to leader and established sort of public business. That's that's doing well. Um, In that journey, uh, along the way, how have you, how has the culture maybe shifted? How do you sort of think about making sure that you maintain the elements of innovation that, that got you there, uh, recognizing you need to operate in a potentially different
Todd: Yeah, the first, the, especially when you, um, get bigger and go public, I think the most important thing for a leader and for the culture is to keep it forward looking.
And yeah, it's great. We can have these nostalgia sessions on what it was like before and how great it was like in the early days. That's fine. You can do that a little bit, but focus on the future. What is the big milestone? What are we trying to do? And we did a good job of this at the IPO time. Like a year or two before the IPO, we really [00:56:00] moved past the IPO as the milestone.
And we said, we want to get to a billion in revenue. We want to get to, you know, more customers. And we said, we tried to get off that going public. Cause that's naturally a big milestone for every tech company that's venture funded. We moved past that. And I think it's been a continuous, continuous journey on, on doing that.
It's like, what's the next thing? The lifeblood of, of a technology company is, is, is doing the next thing and leading the market and growing. And, um, if you lose that, everything else, whether it's, you know, like our culture is very much like I, like I, you know, think is from my experience of PeopleSoft and building up Okta, it's all about how can we make a company that feels like it's our employee's company and they want to work super hard.
But the only reason they want to work hard is because they want to build the next thing. They want to have the next impact. They want to.
Logan: they want
Todd: go further. It's not about like celebrating the past. So I think that's, um, that's a really important thing. Not, not easy [00:57:00] to do because there's times when there's just a bunch of pretty, uh, you know, like blocking and tackling has to be done.
And a lot of every company is blocking and tackling at some level, but there has to be enough of the focus on the future and what's next to make sure that all the blocking and tackling is worth
Logan: worth it.
You, you were, uh, are technical. You were a technical founder in the early days. Was there, was there something that was particularly, um, difficult or didn't come naturally to you in the transition to, to CEO? I just,
Todd: just, my, I'll call it my voice, like my, my public voice, whether that was, um, working with customers or working with, the, the employees as the company grew and had hundreds and then thousands of employees or whether it's by public facing persona, persona or, or communication, I had to, I had to, I had to find a voice that was, um, that worked for me [00:58:00] and it took me a while to find that.
And eventually what the voice is, is it's kind of, um, It reinforces some of these things I've talked about. It's about, you know, giving credit to the employees and being super humble and super appreciative of them and very transparent and very open and very, uh, you know, people don't perceive me as full of a bunch of BS, you know.
They, they perceive me as getting the right, getting the straight story and someone they could, um, rally behind. And I think it took me a while to find that. Especially in the early days of Okta, it was like, Oh, all these people are relying on me and, um, I have to kind of keep all the challenges inside and I don't want to share these challenges because then everyone would get freaked out.
And it took me a while to figure out that's the exact opposite. You gotta, you gotta share them because what do you want? You want empowered people that are going to try to solve the challenges and to solve the challenges, they have to know what they are.
Logan: they are.
Todd: So, it was the, I [00:59:00] was behaving the exact opposite of the way I should be behaving.
So I, I found that voice over the years and, um, and, you know, people will comment to me, they'll, they'll, even now, they'll say, you know, I really like how you presented that all hands and we feel like we're very, it's very, I never have heard this kind of presentation at a big company. It's very transparent and open and I feel like I'm part of the team and, um, it's, Not in a bad way, but it's, that's like, that's what I'm going for in, in like a presentation and like a,
Logan: like a,
Todd: it's a calculated thing I'm doing.
Yeah. Although it comes across as very uncalculated, which is it, it's kind of weird, but it's like the intent of my communication style. Yeah. It's like if you're, if you get good at it enough, it looks unintentional. Um, that's worked really well for me.
Logan: Yeah, it's, it's an interesting thing where a public persona, um, almost needs to be, You know, authentic version of yourself, but it's not going to be the total authentic [01:00:00] version of yourself or something.
It's like you're, you're,
Todd: The, the medium is not, is not suitable to that. You can't be yourself because it's a public medium.
Logan: Yes. That's right. And, uh, and so I, I, it's, it's a, it's a weird, uh, uh, dichotomy or like an interesting thing to try to figure out of what, what is the representation of, of yourself that's, that's authentic. You don't want to be disingenuous in any way, right?
It has to come naturally to you, but it's, it's a version of you, which
Todd: Yeah, like when I see, um, when I see John Chambers speak, or I see Bill McDermott speak,
Logan: Chambers was, uh, Cisco
Todd: Yeah, Bill is the, yeah, amazing, two amazing leaders. But I feel like a, like an amateur hour CEO.
When I hear those, when I hear those. Cause they're just like amazing and polished and professional. Um, but for me, if I did that. It would be
Logan: It would be just, yeah, it's disingenuous in some way.
Todd: a weird, uh, analogy, but kind of [01:01:00] the way I feel about, like, competing with some
Logan: It's a weird, uh, analogy, but kind of the way I, I feel about like competing with some of the luminaries in the venture industry. It's like, I, I can't put I can't go back in time and event the browser right or I can't go back and, like, invest in, you know, Google in 98 or whatever, like whoever it is today.
I'll never be Peter Fenton right? And so it's sort of like you have to be the most authentic version of what it is that can resonate with you and I Um, it's true. I know you're a sports fan, but like if you watch the different generations of coaches that sort of cycle through the, the, the new successful coach often doesn't look anything like the prior generation because the generations are different.
It's authentic to who the personality is in the moment in time, and you need to capture all of that and McDermott probably. Couldn't be the his style couldn't be [01:02:00] What it is today if he wasn't already built mcdermott or doug leone couldn't be a 26 year old doug leone today Uh, it's almost like he has to
Todd: Doug might be the exception.
Logan: Maybe doug could do it.
Maybe maybe maybe doug. Uh, I don't know the the hard charging enterprise sales Uh with the the founder is a very different. Um, you know world than I think most of the vcs that I operate with But maybe doug could pull it off
Todd: Yeah. It is an interesting question, like how much of successes being who you are, it's not totally true. You always have to change and evolve.
Logan: a there's a
Todd: There's a, there's a limit to how far you can change and evolve. If you have to change and evolve too far, you're probably in the wrong situation.
Yes. You gotta find, people say like, find what you're good at or find what you're passionate about. But, so you gotta get close enough to where you can evolve towards your, you can evolve a little bit but still be true to yourself. There's, there's
Logan: ton of college basketball coaches are now like stepping back and it's interesting of I mean BHA right or Tony Bennett or coach [01:03:00] K or Roy Williams or all these people have sort of decided that it's gotten to NIL and the transfer portal and all this stuff.
It's no longer something that they can Keep up with, and I guess maybe it's just reached the outer bounds of their ability to evolve in some ways. And so, um, yeah, and then there's probably be a whole new generation that can keep up.
Todd: keep up. Yes, the new generation will save us.
Logan: Yes, we sure hope so. What about, speaking of new generation, how do you, um, you, you saw and lived client server to, to SaaS and now, um, there's this artificial intelligence thing that, that people are talking about,
Todd: Just, just when we thought innovation was dead,
Logan: It's going to save some big funds out there. Maybe not save, but it'll at least allow them to keep them for a little bit longer, uh, investing in, uh,
Todd: know,
My meta, my meta, meta, that's the wrong word, but my big picture takeaway.
Logan: Meta starts to be a little too,
Todd: uh,
yeah. Yeah, yeah. My big picture takeaway about this is, I was thinking the other day, one thing to always bet on is No matter how [01:04:00] much compute we come up with, we will use it.
We will use it. Never, never think we will have too much compute. I mean, if you think about an, uh, an H 100 and all these, all these, all the hardware that's going on now and all these clusters that are being built, we will find a way to use it.
Logan: Yeah. Always
bet on compute.
Todd: yeah, well always bet on, um, yeah, I mean, there's going to be more compute, but, but on. the insatiable, uh, drive to use it. We will figure out how to use it. Yeah,
Logan: that's an interesting, interesting meta takeaway. I, um,
Todd: I, I heard, like, at
Logan: heard like at the end of the
Todd: day,
I mean, think about what these things are doing.
Logan: it's
Todd: These, I mean
Logan: Is there anything cool you guys are there
Todd: No, I mean, like, just, like, these, the, you know, LLMs and, it's, like,
Logan: every word ever, and
Todd: it's, like, okay, we're gonna take every word ever and we're gonna, like, weight the
Logan: every other word
Todd: of it occurring with every other word ever. And we're going to like run that through a massive [01:05:00] cluster for like 10 to 10 months.
Logan: And we're not like, and it's going to spit some things back. We're not totally sure why it did it. We can't explain how it's coming back to you. But, um, yeah, it's, uh, there's, there's, there's countless things I feel
Todd: It's like, um, yeah, I remember, remember the, yeah, the with mobile, right. It was like, we'll just have a mobile phone.
That's a Mac. What are you gonna do with the mobile phones, the Mac? It's gonna be too heavy. Well, no, there's a lot of stuff you can put an awesome UI on and you can have all these apps and same thing. It's like always bet on the hardware, always bet on the hardware being used.
Logan: it's interesting.
Logan: I, um, I heard you mention that your CEO's role boils down to five or six critical decisions a year, plus, you know, tons of tiny ones from a calibration standpoint. Is there, um, is there anything You do from a decisioning framework or way you approach if you recognize maybe you're in those 5 to 6 decisions a year, or is it you actually don't know which are the 5 to 6
Todd: I think the first thing I'd try to do, and this, [01:06:00] through the phases of Okta, this, uh, I remember a distinct change when the job slowed down.
Meaning that I felt like there was enough team and infrastructure and process around me that a lot of the day to day stuff was being done. And it slowed down enough for me to think, wow, really it's five or six decisions a year. And I think that's a milestone. Like you should think about building a company.
You should think about trying or recognize when you get there so that when you get there, you're not, you're not running around doing a bunch of low value stuff and not doing what you need to do to make, to try to get a high hit rate on those five to six decisions. That's the first thing.
Logan: thing. At what point do you feel like you hit that?
Todd: it was like, you know, I like 10 years ago, 2014 so the company Okta was, yeah, maybe a little less.
And. You know,
Logan: 300 people, 400 people,
Todd: two, three hundred people, four hundred people, something like that. Basically, I, I say before you have a hundred and fifty people, you, until you [01:07:00] have a hundred and fifty people, you don't really even have someone in every job. You probably don't have, like, a full time recruiter, you don't have all these key jobs, but a hundred and fifty, you have someone in every job, and then twice that, you probably have enough redundancy where you should be not frantically in the day to day, and you can step back and try to make some of these
Logan: you can step back and try to make some of these decisions. Um, I think you probably have several
Todd: Um, I think you probably have several that you know, and maybe a couple that are sleepers that you don't know. Um, and, the, like, how to try to make, how to try to have a high hit rate.
Um, You know, a lot of it sounds basic, like, try to gather as much information as you can and get a bunch of different perspectives. But
Logan: of different
Todd: the confirmation bias is incredibly, incredibly powerful. You know, interpreting information that confirms your bias to [01:08:00] what the decision should be. And so one thing that I've found that's worked pretty well is really work hard to figure out dig for stuff that would be against your kind of bias in, in the decision making.
One of the things we did that worked pretty well, I've heard a lot of people do similar stuff, which is, um, for big decisions, set up a, like a, two teams to present the opposite cases. So as the CEO, if I'm like, you know, we really want to buy this company, I think this company is great, you know, for all these reasons.
Set up two teams and one team presents the, this is crazy, we should never do this argument. We should do this. This is the most amazing thing and let it present and have like a structured thing where they spend an hour Presenting the pro case and spend an hour presenting the negative case. So that's a that's a Tactic to try to what is that trying to do?
Well, it's really trying to Get a balanced perspective because the CEO is probably leaning one way So but you know put your best people in the other way [01:09:00] tell them to argue against you That's worked pretty well for us. And it doesn't have to be an acquisition, that was just an example. It could be product direction or, um, prioritization.
Um, but yeah, there, a lot of times they tend to be people. Um, people decisions. Hiring someone, you know, changing an organization to focus on a priority and that means a leader gets, that's a, those things have, those are big decisions that have many years that, that can compound positively or negatively.
Logan: There's, there's, um, one of the most important Parts of any executive or leader or anyone within a company is the ability to, um, get great people to work alongside
Todd: to
Logan: them.
Is there, is there a way that you think about, um, assessing if someone has that competency in the early days or any way that you calibrate on if someone has the, the talent nexus?
Todd: I think that, first of all, this ability for [01:10:00] great people that work for someone is incredibly important. I think, I mean, you know, I talked about, I think, when I think about leadership qualities or assessing a leader, the first, the most important thing I see is their ability to set a vision and a strategy for what they're trying to do.
Just, and that's partly, like, coming up with a compelling strategy or vision. It's partly their ability to communicate it. And it can be for any group. It can be for a product group. It can be for the. people team, it can be for sales region. Can you articulate the vision and the strategy for what you're trying to do?
If you can't do that, it's probably not a good sign that you're going to be able to lead that function, even if you could do everything else right. You can hire good people and like operationally check the metrics, et cetera. So that's vision strategy is really important. The, um, the, the second thing is kind of like,
Logan: of like
Todd: the resourcing and getting the right people on the task.
And this is where the ability to get good people to work for you comes in. And there's really, I mean, this, [01:11:00] this is one where you can, showing a track record of this is a good indication that people will continue to be able to do it. One thing to think about is like
Logan: is like, when
Todd: when leaders have gone from company to company, who's followed them.
Like I said, you know, like I think it was really strongly, I feel really strongly that.
You can try to assess a candidate's ability, but let their past companies and their past managers tell you who follow them. So when you went to this new company, who'd you, who followed you there? When, when new people come to Okta and if no one follows them,
Logan: a little
Todd: get a little worried.
Um, and as painful as it is, they leave and no one goes with them. It's probably not a good sign as well. So I think that's, that's something that's very important. And you can also just. You know, if people in these teams have just have awesome people that are working on these teams, it's a good sign. It's a good sign what, what they're doing at your own company.
So I think that's really important. And also, you know, [01:12:00] a leader's ability to understand at least some level, the details of what's going on in their organization is really important. Um, and then the last one I'd say is, this is one like, I don't know, I'm not great at this one. And I think a lot of people struggle with this is.
prioritization. I mean, we have, we, I mean, myself included, it's like, I'm a, I'm a yes. And let's do it all.
And that's
a problem, right? You got to like prioritize, you know, we have a hard time getting things done in general when we're trying to do too much stuff at once. And a leader that can actually, along with the vision, along with knowing the details, along with building great teams and getting the right resources on a problem.
If they can actually then prioritize and make sure that the team is executing in the right order, it's gold.
Logan: gold. As you, as you sit here and maybe look out a couple years in the future, five years, um, whatever, whatever the right time horizon is, um, are there new [01:13:00] challenges that you look forward to, uh, or things accomplishing over the course of the next couple of years and just sort of milestones that keep you motivated and in pursuit of X, Y, Z thing, beyond financial targets or
Todd: There's a, there's a ton of them, and I think this will resonate with a lot of people that maybe are earlier in the company journey, which is building a, a, a company that's at scale with, you know, thousands of people and thousands of customers and, or users and Um,
Logan: know, big employee base and good revenue
Todd: you know,
Logan: it's, it's so
Todd: employee base, and good revenue, and brand. It's, it's so hard. And it's such a struggle, and it's so rare, and a big accomplishment. But once you get that, the, what you can do with that is, feels like, to me at least, it feels like, this, it's, the [01:14:00] potential is even much higher. Um, you know, a simple way to say it is, uh, you know, getting to a billion dollars in revenue.
Logan: in revenue is
Todd: hard, but, um,
Logan: you want
Todd: if you want to get to 20 billion in revenue and 50 billion in revenue, you have to get to
Logan: one.
Yeah, yeah,
Todd: So it means you're on the path and that's like the impact you can have and the value you can deliver to investors and to customers at 20 billion and 50 billion. That's incredible. But you've built the foundation, you've built the billion dollar, whatever the number is, billion dollar foundation.
It's like,
Logan: like what a challenge
Todd: What a challenge it would be to get to 20 and 50 and, and whatever metric you want to use, but all the pain and all the uncertainty in the beginning, you really get motivated to take advantage of it and not let all that pain and struggle go to waste by under, underliving or undershooting your potential.
Logan: pain and struggle go to [01:15:00] waste by under, under living or under shooting your potential. The business will have done, and you would have done as a leader that you sort of look back and say, Hey, this is really what I hope we would have accomplished with the business.
Well,
Todd: this may be a little specific to our industry, but I
deeply am motivated by and believe that. It all needs to be simpler. It's, it's, it's too complicated. It's too complicated to stitch together all this technical identity security infrastructure. Um, and not only is it too complicated, it's, which means it's costly.
It's leading to bad outcomes. I mean, why are there, there's, there's many reasons there are so many security breaches, despite billions and billions of dollars in cyber tools. Um,
Logan: tools.
Um,
Todd: [01:16:00] One of the big reasons that it's too complicated to put it all together in a secure way. People are building these companies are building these applications and these I T infrastructures and they're over many years and they're buying companies and inheriting legacy technology and it's super complicated.
And if we can
Logan: part of
Todd: Be part of this solution to simplify it and standardize it and make it all snap together easily and, and make it all cheaper and easier and actually have better, fewer security breaches and more robust infrastructure. That would be amazing. And that's going to take, and that's, that's an industry wide Goal, that's one company is not gonna do that.
It's like leading the movement to do that, which is, I think that's very cool. It's very motivating.
Logan: yeah it's a noble mission
Todd: Yeah. Yeah.
Logan: yeah this stuff hiring firing promoting
Todd: um, super important.
Logan: yeah motivations I think is just a really [01:17:00] I think people appreciating that there's no there's no point in the journey at which you
Todd: uh,
Logan: that you necessarily feel. You just recalibrate to new competitors or new milestones and all that stuff. Getting to that is an intrinsic motivation and that the inputs or the means, uh, are
Todd: yeah. I had in early on you have this idea that it, it, it, um, you, you've arrived. Yes. You get established. And that is true to some degree.
Like you get to a point where you feel like it's less likely that it's all gonna fall apart. Yeah. But. You recalibrate
Logan: to a new, I I remember like, if only I got to be a general partner at a venture firm, then I, you know, I could exhale, and then you recalibrate, you recalibrate the whole new set of people and you're like, oh, wait, no, now, now I'm no longer competing with my associates at Battery.
I'm now competing with, you know, pat Grady or Doug Leone, or you know, Ben Horowitz or whoever it is, right? And, and it's like, that's a whole new. set of [01:18:00] people to reorient, and now you have all this same insecurities manifested in a different way about, like, trying to establish. So I'm sure company, I mean, every company seems to have that same journey.
Todd: that same journey.
Yeah, yeah. That's what, I mean, that's why it's such a satisfying job. It's all continuously challenging. Have
Logan: have you found IPO? We didn't talk about that necessarily. Has that been a rewarding, like, something that you've, are you in the pro IPO camp, uh, or?
Todd: SAS recurring revenue is a very good thing.
Logan: Yes, I'm a fan.
Todd: can't imagine, uh, trying, I can't imagine trying to manage investor expectations without predictable recurring revenue.
That would be a challenge. That being said, I think it's very simple to me. It's like, you paid your employees in stock, you gotta let them get paid. It's, it's almost like a loyalty thing. And I think every other format of tender offers [01:19:00] and secondary markets, you know what they all are? They're all a bad approximation of this thing we have called the public stock market that lets people get paid in a regulated way.
That's,
Logan: that's Yeah.
Todd: You
know, there's some controls to prevent fraud, et cetera, et cetera. So just take advantage of that. And so if you have the predictable business and you also, you do have to run the company in a way that's, you know, Governance and you know, but you probably want to do that. Anyways, we did that at Okta Like we kind of knew what we wanted to do We ran it well, and we didn't have these problems.
We didn't have these concerns that we weren't going to be able to have compliance Certification so and I think it also for our business too. I think it helped the it does help the perception People are buying security software and infrastructure software It's a public company with audited financials and it's in the news a little bit, you know doing some earnings every three months It's a good thing I think um, and it hasn't felt It hasn't felt, it's been, you know, seven years, um, eight years next, next spring.
It hasn't felt, it hasn't felt super constraining. [01:20:00] Um, you know, people say like, Oh, you know, you can't,
Logan: can't invest as
Todd: you can't invest as much money as you'd like to have. It hasn't felt that way for
Logan: us. Yeah, and it's, and it's,
Todd: it's yeah. It's and it's, and it's by the way, not that different when you're setting expectations for your VC investors.
When you have 5 million AR, you want to like. You don't want to under promise. You want to under promise and over deliver. You want to set realistic expectations. You want to be consistent in your messaging. You want to balance both short term reality with what the business is doing, with long term potential in a way that's clear and not confusing.
So a lot of it's similar. But, um,
Logan: but, um, I think, yeah, I
Todd: I think, yeah, I think those are my
Logan: Yeah,
Todd: Yeah, sure. It was fun. I enjoyed it.
Logan: Thank you for joining this episode of The Logan Bartlett Show with co founder and CEO of Okta, Todd McKinnon. If you enjoyed this discussion, we'd really appreciate it if you shared this episode [01:21:00] with anyone else that you think might find it interesting, as well as subscribe on whatever podcast platform you're listening to us on.
We look forward to seeing you back here next week on another episode of The Logan Bartlett Show. Have a great weekend, everyone.