[00:00:00] : Welcome to the Logan Bartlett Show. On this episode, what you're gonna hear is a conversation I have with Philip Calazan, the co-founder and CEO of Verkata. Philip and I talk about a number of the first principles decisions he's made in growing Verkata into one of the fastest growing private companies out there today, a three and a half billion dollars business that employs over 2000 people.
We also go deep into their 2021 hack and what it was like dealing with that crisis and communicating with all their customers. Now, here's Philip
[00:00:38] Logan: thanks for doing this. Yeah,
[00:00:39] Filip: Thank you for having me.
[00:00:40] Logan: So for people that don't know Verkata, you have how many people?
[00:00:45] Filip: Uh, just out of 2000 employees today.
[00:00:47] Logan: and raised,
[00:00:48] Filip: a couple hundred million, I think close to 500 million. Lifetime.
[00:00:51] Logan: most recently valued at 3.5
[00:00:53] Filip: and a half billion.
[00:00:54] Logan: Three and a half billion. And uh, I guess people in the investor community know this, but you're doing.
Hundreds of millions of revenue, uh, growing very quickly and, uh, break even
[00:01:05] Filip: Yeah. Close to breakeven on cash flow and super healthy margins on software and hardware that we sell
[00:01:10] Logan: A very impressive financial profile of the company. I think as we get into what Furkata does, uh, I I think people might be surprised how, uh, how successful Furkata is as a business.
So how would you describe what it is Furkata does?
[00:01:24] Filip: Uh, we build tools that keep buildings and people safe. Uh, so we started with video security with cameras, but you know, we built today a whole platform, a whole ecosystem that manages the physical safety of premises.
So, um, everything from cameras to how you get in through your doors, you know, think of the badge that you carry, that you beep into the, the room, um, you know, through alarm systems. And we put, you know, through modern software, all of that in one platform, right? So it's one integrated experience where the customer can, in one place manage the physical security of their premises.
At one location at tens of locations and you know, ultimately at hundreds of locations around the
[00:02:01] Logan: So, so initially was a camera product,
[00:02:04] Filip: Yeah. We started with video security. That's
[00:02:06] Logan: And then you have four other products now, or
[00:02:08] Filip: we've got six product lines.
[00:02:09] Logan: products. Can we, can we go through each one?
[00:02:11] Filip: Uh, sure. Yeah.
[00:02:12] Filip: So we've got, uh, cameras, that's where we started video security. Um, the second one we call access control. That's doors, badge readers, uh, you know, using Bluetooth to get through your building. Um, then we've got alarms. Um, so think of, uh, you know, think of ADT, right? Think of your, uh, alarm panel, your arm, your building at night.
Bad guy shows up, alarm goes off, we dispatch the police. Um, so those are like the, the three big ones that I think of. Um, and then we've got air quality. Um, that's a product started out for schools to stop kids from smoking or vaping in bathrooms when the vape epidemic was happening. Um, so that product.
Captures air quality, everything about it, right? From vaping to particulate matter. Um, you can use it in, you know, manufacturing, refrigeration, so on. Um, but popular for us in schools. Um, then we've got guest management, uh, which is, you know, think of people who come and go into buildings, right? So you, you know, enter a new premise, who are you?
Sign in, take a picture, you know, that of course, ties to the camera system could issue a badge to get through the building. Um, and then the last bid, which is our latest product line, um, is an intercom product. So think of what Ring did for the front door of a home. Uh, you know, we're putting a similar functionality, um, on the many entrances of businesses, right?
[00:03:29] Logan: So my understanding is you've been fascinated with camera since an early age to the point that you, uh, dispelled a belief in Santa Claus with your parents, uh, using a camera. Can, can you tell that
[00:03:38] Filip: Sure, sure. It's, uh, uh, yeah, funny story. Uh, so, um, I've always liked cameras. I think my dad got me into, uh, you know, kind of photography. Uh, when I was a kid, I was back in the film base. So, you know, I remember on family trips, my dad would take photos and, you know, we would go through them and talk about what's good, what's bad.
Um, so that's how I got into it and I always loved it since, um, the story about Santa, which, you know, I don't, I don't remember. I was five, seven, something like that. I remember
[00:04:04] Logan: the way, if kids are listening, uh, parents maybe turn this off for this one. We're, we're about to, we're
[00:04:08] Filip: the reality is about to hit,
[00:04:09] Logan: yeah, we're about to spoil
[00:04:10] Filip: so I'm a kid and, you know, at the time we're living, uh, you know, this is in Poland, uh, and I, I think I'm, again, five or seven years old or something like that. And. My family at the time, we got a video recorder, like a camcorder. Uh, and I think it was, you know, kind of the, at that time it was rare to have that type of device, you know, in, in that country or just getting out of communism and all.
So I was, as a kid, I loved gadgets, right? So I'm like, I'm gonna like get my hands on this thing and, you know, let my parents use it and play with it. So of course I get, you know, into recording random family clips. Uh, but then it culminates on Christmas where I, you know, I sort of hide the camcorder on a shelf or I forget where exactly I put it.
Uh, and you know, and in Poland actually what happens is you get the gifts on Christmas Eve, so the twenty-fourth. And what always happens, and you know, I had a suspicion about this as a kid, is the parents will create some fake commotion. They distract you, they take you to another room, you know, and then someone else brings all the presents and say, Hey, Santa came and you know, there's smoke in the chimney and whatever, whatever.
And so, you know, that year Santa came, there was smoke in the chimney and then there was a playback of a tape, which was super fun. Yeah. Uh, with grandma and grandpa running with all the
[00:05:16] Logan: Well, it, it, I mean, I guess from, from, uh, spying on Santa to now, uh, building a company doing hundreds of millions of revenue and worth three and a half billion dollars, uh, cameras have a throughput throughout your life
[00:05:29] Filip: Yeah. There's definitely that thread. And um, you know, I think in starting this company, even though I didn't have, you know, that much background about this video security aspect, uh, you know, of the industry, certainly all the camera knowledge, how cameras work, how they record, how codecs works, like all that stuff I was passionate about.
Um, and that definitely helped inform and, um, you know, help us build the very first products we
[00:05:51] Logan: So early days you, you had sold a company to Chegg while you were still in undergrad. Correct. And you took a year off with your co-founders to kind of ideate and try to come up with an idea for the next company? Correct. So your mid-twenties or so at
[00:06:06] Filip: Late twenties. Late twenties. So I, um, I sold my first startup, uh, shortly after my master's year, um, at Stanford. And then, you know, I stayed at Chuck for a couple of years. I called it my business school in the Real World. It was fantastic. That company grew really fast and, um, I had the privilege to just learn from a team that, you know, was seeing that business scale very quickly.
Um, and then after that, um, I knew I wanted to start something again. And so, um, I think it was late 2015 when I had finally gotten the green card that unlocked me to, you know, start thinking take, take time off and, and then do something again. Um, and so then I started pulling the, you know, some of my friends back together.
And, um, yeah, one of the things we've done is we, we gave ourselves a year, or that's what we said is we would take a year to land on the right idea. If we landed on one and started a company, fantastic. You know, if not, we would, you know, then go back to, uh, go back to industry.
[00:06:59] Logan: Um, so, so, so how does the, the main product, the physical security product, how does that work in practice? And I guess for people that are listening. We can show, uh, on YouTube or whatever it is, we can show a little bit of a demo as well,
[00:07:10] Filip: Yeah, so look, it's a, um, it's a software platform and, um, you know, you can, our customers use it in their web browser or you know, their mobile phone. Um, and I think, you know, one of the key values that you get right off the bat with, with our solution is you, you see your whole organization in one place, right?
And so, no matter where you are on the world, where if you're on the go, you pull up your laptop, you, you know, you're not opening VPN networks and, and punching holes in firewalls, you can just access your physical security infrastructure. I. Anywhere in the world on the go, on the phone, on the, on the browser.
Um, and then, you know, I think as it pertains to the different products, like, you know, for example, for, um, you know, if we're looking at, um, at our cameras product, um, I think a lot of what our customers appreciate is, is, is us getting the basics right. So, you know, you're looking at the video feed here from, uh, you know, from our office in San Mateo.
You know, again, we're on the go with, uh, you know, a five-G connection on my iPhone. Um, the video looks crisp, the stream doesn't freeze. You can see details, you can zoom in on, uh, you know, you can zoom in on these details. You can see, um, you know, the variety of people that, you know came and left our office, uh, below for people
[00:08:18] Logan: without the, the video, I mean, you can see the path that people are walk walking. It shows a little bit of a outline, almost like a, a tail, uh, follow. The direction people came from as well. And I guess, uh, there's, there's another one here that will follow, uh, people as they're, as they're walking across the street or something to catch, you know, the, make sure you get the full footage.
[00:08:39] Filip: exactly. And you know, I think, you know, a lot of the functionality here, you know, detecting people, detecting vehicles, detecting license, it makes all the security workflows just much, much easier. Uh, you know, if you, um, as an example, imagine you have a parking lot, right?
And, and you have cars on that parking lot. You close your business at night. How do you detect if anyone's messing with your cars at night? Right? We can do that. You have cameras, uh, we'll automatically detect intruders, people who might be, you know, jumping defense. Um, and based on that, you know, we could dispatch the police, we could send a message to, you know, your security team.
So just makes all of these workflows, uh, you know, much easier.
[00:09:17] Logan: May maybe talk about the privacy first approach to this.
[00:09:21] Logan: One of the things that I had heard that I found interesting was the, the blurring of the face, uh, as well, unless it was necessary to, to, to
[00:09:29] Filip: so, so this is a, a new feature which we're, uh, very excited about. But you know, we think that we can get to a place, um, where most of the video that people are watching for security purposes has identities obscured, right? So, uh, we're building a system whereby, you know, using the information about where people are in the scene, uh, we can actually blur their faces or blur their identities.
Uh, of course with a tap of a button, a security guard could unblur it to see what's going on. Uh, but the idea behind that whole feature is that, you know, there's hours and hours like of footage where identities could be protected. Right? And, and, and ultimately, you know, my hope is that we can get to a state where we can.
Show metrics for a customer or maybe for our whole fleet of, you know, just how many or what percentage of video watched has those identities protected. Right? And, and then to me that's, that's very powerful because you're, um, you know, you're, you're protecting privacy at a, at, at a very massive scale,
[00:10:26] Logan: And, and video, as we've talked about isn't exactly, um, it's not new, but a lot of things you guys are doing in cloud, uh, or with cloud, enables some more new and real-time functionality. Maybe maybe speak to the example of the bank and, uh, what you, you guys were able to do with that.
[00:10:43] Filip: Yes. Well, one, one of the features we built early on, which has been very powerful, was, you know, we, we said, Hey, you know, video security traditionally is, you know, literally, you know, pumped to a server in the basement. And so if you ever want to interact with it, you know, the access to that server is, is usually clunky.
It's either a remote desktop. Um, or, you know, you're going physically into the building and, and then looking at the video in, in that room. Um, so, you know, we wanted to make that access very portable. So a feature we built very early on was we made it very possible and very easy to share access to cameras, to, you know, anyone who needs access to those cameras on a temporary or permanent basis.
So, you know, with just your phone number, I could email you a link to this camera, uh, and you could pull up that same exact view on your phone, um, in real time without, uh, you know, without kind of downloading any apps or, or, or signing up for anything. Now, you know, when we built this feature originally, you know, we thought, you know, that that'd be very useful in certain security situations when you're trying to navigate them in real time.
Uh, we did actually have an incident with one of our customers where, um, you know, it's a financial institution. They had a hostage situation and they were able to share access to the video feeds with the SWAT team, with the police force on the ground responding to the situation. And it was one of those wow moments, right?
Like you're, you know, you're talking about, you know, lives at stake. You're talking about, you know, a, a large response team trying to mitigate the situation. You know, traditionally what you might have is you might have a person from that response team, you know, in a room with a walkie talkie relaying information to the other officers.
You know, now within the matter of a couple of quick clicks, you could share access to that real-time feed of what's going on, you know, with tens or even hundreds of officers if needed in real time. Um, you know, that really makes a difference in, in that kind of situation.
[00:12:32] Logan: no need to download an app. You can do it through your browser. You can watch exactly what's going on.
[00:12:38] Filip: Yeah. And I think that's a big part of our story. You know, of course we have native apps which make the experience dead much better. But, you know, I think one of the, one of the things we wanted to do from the beginning of the company was to make the platform. Accessible on any device, anywhere, any browser, like as maximally compatible as it is possible without the need for downloading, you know, apps or plugins or video codecs or anything else.
[00:13:02] Logan: Hmm. And so, so you're iterating on different ideas and how do you actually go about doing that? How far down the path do you go in trying to validate these
[00:13:10] Filip: I think that's like one of the harder questions. So we, uh, you know, first there was two of us and then three of us, and then ultimately four who co-founded the company. But, um, it was really getting back into the basics. It was, hey, let's, you know, wake up early and work all day and prototype some idea that we have and you know, get our friends using it and see how much traction we have.
Uh, but I think one of the things I learned, and this is, you know, from the first start-up and from the time at CHAG, was to just be very open about my ideas, right? So when I did my first start-up. In school, I thought, Hey, like you have to be secretive, and what if someone else does this thing that I'm doing?
And they, and it's like, none of that matters. Nothing's proprietary. It's all about like how well you do it and the execution and you know, kind of the, the, the passion and, and work you put into it. And so this time around, you know, what we would do, and, and this was, you know, really the seven months leading up to Verkato is we would, you know, we'd start building something in parallel.
We would, you know, call up any of our friends, whether in industry or in venture or whatever.
[00:14:10] Filip: Um, and we'd be floating these ideas to them, right? And, and then some of them people would say, Hey, this is crazy. You should not touch this with, you know, like, don't, don't do this. Um, and some of that was like, yeah, like there's maybe something there, right?
And so, um, that was a very formative process. It also, I enjoyed it because it got me back into being very close to customers, right? Like in that process, you know, I was calling a lot of people. I was, you know, I was writing and building some of the software that, that we were experimenting with. But I would ultimately be.
You know, telling a lot of stories and reading reactions and like trying to see what, you know, what people, uh, would say about these ideas and all of that proved extremely useful once we, you know, kind of crossed the video security idea.
[00:14:52] Logan: How many ideas did you take to some prototype or that you put in front of
[00:14:55] Filip: Uh, a couple. Uh, so, you know, I think first, and this is, you know, kind of obvious going back to my photography passion and background, um, I think like everyone in the, you know, that era, I'm like, ah, I have like some idea for a photo app, right? And, you know, so of course I build some, you know, Google photos meets Instagram meets Snapchat, who knows what type of app.
And so, um, that was a fun little project. And then one of the first ones, uh, and we got, you know, like tens or maybe a hundred friends using that. Uh, but that space was just too crowded. We, you know, we didn't think, uh, you know, we could, uh, kind of make it happen there. The next one, which was interesting, which we also build a prototype of which came full circle after Verkada, was, um, um, at the time we, you know, it's like sort of, you know, around 2010, 2015, many cars became keyless, right?
Like you could carry a fob and just open the door and. That's a super pleasant and super awesome experience. Um, and so we thought, Hey, we should do that same thing for a home consumer lock. Uh, and so we, you know, we brainstormed, we prototyped, we, um, I actually remember very, very vividly the, one of the early prototypes was we bought a commercial lock system, which had the motors to drive the bolts and all that stuff.
And we wired it into like a, I think it was a retrofit kit for Toyota, old Toyota cars, um, to make them keyless. And so, you know, my house was keyless. It also looked like, you know, some crazy sketchy den with like wires sticking out of the wall. Uh, but, but that was a fun project. Uh, you know, I think ultimately we decided, hey, building a consumer device hardware, you know, super competitive, low margin, hard, uh, but we learned a lot through that process and I think, you know, some of those learnings were.
Was what gave me, you know, sort of the confidence or the energy to go, um, kick off access control, which was our second Verkada product after cameras, which had exactly to do with locks and getting people through
[00:16:46] Logan: So how did you land on the idea for Verkada itself?
[00:16:49] Filip: Uh, for Verkada cameras? Yeah.
Yeah. I mean, look, I had, um, I had a lot of touch points with video security. So, um, I'm a person who, like, I love gadgets, right? Like if, if you go to my home, like I have, you know, the nests, the rings, the, you know, various sensors. I had all of that. Um, and I obviously like cameras. And so, uh, my story was, uh, you know, I had remodeled a home and I put a camera system.
And because I'm a nerd, I thought, Hey, let's put an enterprise-grade system. So I think I bought, you know, axes, cameras or whatever it was at the time. And, you know, they were pricey, they were pricier and on paper better than like a consumer device. Uh, but then I had that moment of like, wow, that experience.
It's not up to par to modern consumer device standards, right? I, I mean, I literally had a, you know, a Windows server box down, like somewhere in, in a side room in a closet essentially that would be recording the video. Um, and it was just really hard to get it out of, out of those cameras. So that was my experience.
Um, and then one of my co-founders, Hans had a, uh, you know, similar run in his previous company. They had cameras in their office, um, and they had actually a break-in, someone came in and stole a bunch of, um, iPad devices that they were using to test their product. Um, and then, you know, getting the footage was really hard.
The footage was grainy. You couldn't identify the people. Um, and so that's what kind of got us talking about cameras, right? And, and, and, and, and kind of getting into the details of it, we're like, ah, wait a minute. Like, cameras are getting pretty good and they're getting pretty inexpensive and, you know, what do you have on your iPhone is, uh, you know, is pretty magical, uh, in a very small envelope.
Uh, and so, you know, all these ideas started going around, okay. Like, how do we build. A modern software driven camera solution, you know, for this giant market, right? And we didn't quite know how big that market was, but the more we started getting into it, the more signals we got that man, there's just cameras everywhere.
We're, we're everywhere. You look, right? Like literally, we started talking about this and every building we would walk into, we look at the ceiling, go 1, 2, 3, 4, 10 friendly cameras, right? And we're like, ah, they're everywhere, right? So everyone needs it, uh, or everyone at least is buying it. Uh, and so from there we started getting into, you know, why do people buy it?
What do they use it for? What are the problems or some of the assumptions we had, you know, right or wrong? And how much you build something that, uh, you know, that would compete in that market,
[00:19:07] Logan: So, so the wine now of it, as you were thinking about it, was camera quality on the consumer side. Uh, and the experience that you got from the software with your rings or whatever it is, is so much better than what you're getting on the commercial side. Hardware costs are going down, camera fidelity and qualities going up.
Software experience is better. Anything else that you were kind of thinking about? Was AI on your radar or
[00:19:32] Filip: was, it was. I mean, I think it was very, you know, fascinating at the time. You know, I think computer vision had just advanced a lot and it was driven by, you know, all the automotive industry. Um, and then, you know, the likes of Google and Facebook doing, you know, uh, recognition in, in, in terms of photos and, and things you would upload to the internet.
And so all of that was exciting. 'cause we thought you could take some of that ideas, you could take some of that latest research and you could apply it to a camera product and that could make that camera product so much better. Right? So we had all these, you know, kind of concepts and ideas that could further improve the camera.
And critically, you know, I think that improvement would come from software, right? It would come from software and software iteration and how the, that software was built. Um, you know, to sort of be able to take these advances in, in a market where we sew. Most of our competitors, or most of the people at the time that we, you know, that we saw were predominantly hardware companies, right?
They were building cameras and they were building good cameras, right? But if you looked at them for the past couple of decades, predating, you know, sort of, uh, you know, when we got into it, they competed on hardware, right? More megapixels, better lenses, more waterproof, more watertight, you know, smaller, bigger, whatever you name it.
Um, they've built it and they built it well. Uh, but I think it became very apparent to us that the modern buyer is so excited about how well, you know, software can make their experiences work. That that's what they were craving, right? And so we're like, okay, great. You know, sort of the, a lot of the hardware Complexity had been already solved.
Um, you know, it's much easier to build a camera today than it was maybe 20 years ago. But the missing piece was the software that goes along with it to make, using the product, you know, really seamless and, and, and, and, and kind of part of the every day.
[00:21:21] Logan: And so the vision from the beginning, uh, included what did it, it included the camera obviously. Did it included access control as well? No.
[00:21:28] Filip: No, no, no. So when we, you know, when we started the company, I think, you know, you're sitting in my, in my living room and we, uh, you know, we're exactly $0, like, you know, four, four of us. Um, and the way we were thinking about it is just hated the video security market is massive.
Um, I think we pegged it at around 15 to $20 billion of spent per year. You know, kind of depending on which research we, we read and we're like, Hey, we think that's big enough to get to a hundred million dollars in sales. Like, that was literally the metric. Like, is there enough market here? Is there enough demand?
Is there enough customers where we could go from a. You know, zero to a hundred million in the next couple of years, and then see where we take it from there. Um, so that was really the, you know, kind of the initial focus and, and then the way that the company was
[00:22:11] Logan: What were the points of validation that you got, uh, that people would actually buy this? Because I imagine this is probably a fairly risk adverse buyer in a lot of ways, at least historically, but how did you go about validating that the the, the product market fit would be
[00:22:27] Filip: there? Yeah. So, you know, like in the very, very beginning of, of the company, and I think this was, you know, some of the learnings from my past startup and, you know, for Hans from, you know, from his days at Meraki, um, one of the very first things we did is we started calling.
Anyone we knew who's like even remotely resembles a customer, um, or a, you know, partner and integrator.
[00:22:48] Logan: And what were, what were those titles like? Who are the, the
[00:22:51] Filip: director of it at a school? Uh, you know, we, I remember flying down to a couple of schools, like people would, you know, it's like you would find any way possible to just get a tour of their security facilities, right?
And you might imagine, right? Like, you don't have an entity who is this guy? Philip and Hans, they wanna show up and through our security center. Like, you know, it's, uh, you know, it's, it's, it takes a little bit of, uh, you know, finding your way in. Uh, but we were surprised. We were nicely surprised that, you know, once we knew enough about the technology and the market and once we could sort of articulately talk about some of our ideas, people were very receptive, right?
They were like, wait a minute, nothing's changed in this industry for a long time and they've got all these problems and, you know, these guys seem smart and they maybe wanna solve it. And so we, you know, we got access to a lot of stuff. We saw a lot of. Security operation centers, cameras, we saw, uh, you know, people would send us footage, uh, of, you know, incidents.
And that kind of gave us a sense of like, okay, where do cameras work well and where do they break down? Um, and then on the, you know, kind of more business side of it, uh, we talked to a lot of integrators, right? So, uh, you know, we, from the beginning, we didn't sell the product ever directly to the customer.
We sell it through an integrator, and that's a very critical part of the ecosystem. So we wanted to know how the integrators think about the, you know,
[00:24:07] Logan: can you. All that distinction of why that's important and why you go about doing it that
[00:24:11] Filip: yeah. I mean, I think, you know, the, the easiest way I can explain that is, um, you know, if you think about buying a, a, a camera for home and nest, you know, or something like that, you know, you buy one, two, maybe five cameras if you have a big house and you, you know, take them out of the box, put 'em on your Wi, Fi, you know, if you think about, you know, a typical customer for us.
They'll buy tens of cameras, maybe hundreds of cameras, you know, that gets delivered on a pallet. Uh, and you know, you've got 20 foot ceilings and you need to run cables to get these cameras installed. Um, so you're ultimately dependent on, you know, kind of a network of folks, you know, who will do that work and hopefully do that work well.
Uh, so we're aware of that dynamic. Um, and then, you know, the second piece of it was we quickly, you know, understood that the way the market works is people, you know, buy from those integrators, right? And so ultimately the integrator has access to a lot of the market. Um, and so we thought, hey, if we play nice with them, if we, you know, make our product compatible with that selling motion, uh, that integrator will serve to a customer.
Hopefully that's a successful, happy customer story. Um, and that same integrator will give us access to more market. They'll bring us deals, right? And so that's a motion that, you know, very much played out over the last. You know, seven, eight years of being in business. Um, but we, you know, definitely kind of thought about it from day one.
Uh, but back to your, you know, kind of original question, which is like the validation, you know, we got it on the phone and, and many of the partners were like, oh, no cloud, I don't want it. You know, they're like stuck in their, you know, kind of way of doing things. Uh, but, you know, some, and you know, over time more of them we're excited about it.
They're like, yeah, it's time to take this industry from on-premise to the cloud. Um, and I think, you know, up to the point of us doing it, it, you know, it hasn't really been done in a, in a deep way, in a, in a deep, you know, kind of thoughtful way, right? So there'd all be, like many of our competitors would say, oh yeah, the camera has some cloud component to it, but if you unbox the product and use it, you know, you'd very quickly realize, oh no, it's an on-premise product with some cloud attachment.
As opposed to, you know, kind of an architecture that's thoughtfully built to be cloud-first and be
[00:26:17] Logan: And what are the benefits of, of that, that distinction? You draw right there. Building a first principle for the cloud.
[00:26:22] Filip: Yeah, I mean, I think look like, I'll, I'll give you a, a, a very simple, uh, simple example here, right?
So, um, you know, up to the point of Verkada, anyone buying video security would be buying cameras and then they would be buying servers that they're putting on a rack, um, that are storing the video, right? And, and then that's just how it worked, right? It evolved from you buy cameras and it writes to tape, and then it, you buy cameras and it writes to hard drives.
Uh, and you literally go to that tape recorder or hard drive and that's where you watch the video. Um, and then maybe over time you VPN or use remote desktop or something like that to access that machine. But that was, you know, sort of the, the, the architect architecture of the time. One of the things that was very clear and we heard, you know, from every customer conversation and every partner conversation is that box, that server.
It was a pain, right? It was, it kept breaking and it would have hard drives and hard drive failures. And now you're servicing drives and, you know, replacing them in your rate array. Um, and by the way, this box is probably running windows. And so you're dealing with Windows updates like you are now managing a server, uh, which, you know, for so many other products in 2016, you no longer had to, because they had moved to the cloud and all of those troubles were abstracted away from the customer, right?
And so that was a very obvious point for us to go after, which is to say, Hey, our, our camera product, our software product that comes with it, it will not need that local server, right? It'll connect to the cloud. It'll be managed to the cloud. We will, you know, we will host the servers, we will host the software, you know, we will deal with the updates and, and everything else that comes along with it.
Um, and that proved to be a big value to the customer. One, because it eliminated, you know, this big pain point on, on managing these devices on site. But two, it gives you so much more flexibility, right? You no longer have to think about, you know, how many terabytes or how many servers or, or how do you maintain it.
You can just focus on your problem, which is how many cameras do I need to secure this building? Um, and, you know, the cost and simplicity of deployment is like, literally it just falls. Like, it's like you need 10 cameras, great. Buy 10 cameras. Like very easy to price it, very easy to get the deal done. Uh, you don't have to think about do I have rack space?
And then how many hard drives do I have to put in?
[00:28:38] Logan: How long after launching with physical cameras,
[00:28:41] Filip: Yeah. Uh,
[00:28:42] Logan: uh, before you, you had your next product?
[00:28:45] Filip: Uh, so the company starts in mid-twenty 16 takes us about a year to launch our camera products. So we launched cameras towards the end of 2017. Um, 2018 becomes our first year of sales.
Um, the products sort of takes off in that year. I think we, you know, we had our first sort of real customer and revenue validation. That's when it happened. It was 2018. Uh, and so cameras are. Seemingly flying off the shelf. I mean, we're like, you know, scaling the company as fast as we can and, and trying to keep up with production.
Um, it's about Twenty-nineteen, maybe mid-twenty-nineteen, uh, when we start thinking about access control. And
[00:29:22] Logan: And is that from a customer poll standpoint or is that you pushing, uh, this on the customers and saying we should do both?
[00:29:29] Filip: So it was a bit of both, right? I mean, uh, we talked about the background I had with, you know, with kind of door locks and, and, and that, so I had that, you know, thought, uh, you know, on my mind.
Uh, but what actually happened with our customers is they were loving our, you know, software solution that came with the camera so much that they wanted to integrate it with more of their building. So I would be on a customer call and they would say things like, Hey, Philip, so. You have these cameras. I have an alarm system.
How do I plug the two together when the alarm goes off? I want the associated video. Or, Hey, I have a door access control system and I want images or photos of everyone who comes in through my door for, you know, for whatever security reason, right? So we keep hearing these stories and the first answer, which was, you know, maybe the, the obvious and maybe naive one, um, that we came up with was like, oh, fantastic.
We're a cloud company. We'll build some APIs, we'll give you those APIs and you can tie all the systems together. And that's actually exactly what we did in early 2019. So we built some APIs, give them to the customer. You know, I get back on the phone, Hey, customer, we've, we've got these APIs you can do all of your integrations, customers, astounded, super happy.
Like you built what you said, you'd build so quickly. Fantastic. They buy more cameras. Time goes on. Um, so far, so good. 3, 4, 5, 6 months later we're like, wait a minute. You wanted me to build all these APIs, you're not actually consuming the APIs. What's wrong? Right? And so I. Get back on the phones with the customers.
And, uh, you know, very quickly you, you learn and discover that some of these adjacent product categories suffer from the same challenges architecturally that cameras did. Right? Meaning they're on-premise, they're isolated. Um, you know, customers had a variety of systems from different vendors on different locations.
Uh, and so that's kind of where the light bulb went off and we said, Hey, maybe, maybe we shouldn't think of ourselves as just a video security company. Maybe we should think of what are the adjacencies that we can tackle, um, you know, kind of combined together and serve that customer dream of, you know, having this unified single pane of glass software platform that manages all aspects of
[00:31:36] Logan: And so how did you go about doing that? I, I, I had heard that maybe proverbially, you locked some people in the basement and said, go figure. Go figure this
[00:31:42] Filip: Literally. Yeah. Yeah, yeah. So, so, so, so the story goes that. You know, we kicked off access control and, and you know, at the time I think, you know, the whole company may have been a hundred people or something like that, you know, maybe half of that in engineering.
Um, and so, you know, initially I grabbed a few folks and, hey, we're gonna build, you know, this new product. We started working on it. And in my mind at the time, by the way, access control was gonna be so much easier to build than a camera. I mean, you know, the complexity of the product to me seemed so much, so much simpler than, you know, streaming petabytes of video through the internet.
Um, and so, you know, we kick off the project and months pass and the progress just feels so slow. I mean, it took us a year to go from zero to having a shipping camera in a box six months into this access control journey. You know, we still have wires sticking out of, you know, uh, doors and it barely works.
And it's like, what's going on? What's wrong? Um, and that's, you know, I think that's where we had a key moment and a key learning, which was well. The needs of a new team that has to build a product from scratch, go from zero to one, are dramatically different than what a team that's taking cameras. And at that point, scaling it from, you know, probably tens to hundreds of millions in sales.
Like those demands are completely different. Right? On the camera side, it was all about slowing down a little bit and stability and, you know, kind of, uh, you know, following like what, you know, which customer feature requests were blocking enough deals, right? On the access side it was, I wanna move fast, I want to deploy and you probably should deploy seven times a day.
And if it breaks, it doesn't matter because, you know, we're our only customer, right? And so, um, yeah, we had that moment of like, crap, this will never work if this team is one team, because these engineers end up fixing the camera bugs. Um, and so at the time, and I'm glad my CTO stopped me from this, you, you know, I, I almost went, you know, full 180 from that, right?
So I said, I. We're gonna take the team, we're gonna create a whole new entity, like new legal entity. They will not touch the cameras AWS, they will not touch the code. They'll move to a new building and you know, they're gonna build access control and six months later we'll see if it survives or not.
Right. So that was the mindset. And then, you know, we stopped a little short of that, so we didn't create a new entity and we, you know, let the engineers still talk to each other. Um, but we definitely did move them to a, um, not quite basement, but uh, you know, kind of separate area of our office. And, uh, yeah, we told them, don't touch any camera products, don't touch any of their bugs.
This is your sole mission. You're focused. Um, the other thing was limiting the size of the team. I think there's something to be said about, you know, when you're building something new, um, the overhead of team communication and the number of people with ideas, you know, it's, it's harder to manage 20 people than it is to six.
And so I think it was, yeah, five or six people that we initially said. Your mission is access control and nothing else. Get something working in six months and let's deploy it in our office. And you know, of course, six months later we had a product that worked. Uh, and then, um, I think it was June of 2020 when we launched that product into
[00:34:45] Logan: Hmm.
[00:34:45] TLBS EP 93 - Filip Kaliszan (final edit yt): Hey guys, this is Rashad. I work with Logan on the show, and I wanted to take a quick break to tell you about Red. Point's other podcast, Unsupervised Learning. Unsupervised Learning is our AI podcast where we interview guests from companies like Perplexity, OpenAI, Adobe, and many others about the topical things that are happening in the very, very rapidly developing landscape of ai.
So if you're interested in going deeper, uh, check out the link in this description for our YouTube channel, but also wherever you get your podcasts. So, back to the show.
[00:35:15] Logan: Did your board members discourage you from launching a second product before the first? Was that some maturity or scale or what was that conversation like?
[00:35:25] Filip: I think it was a, you know, it was almost like a skunk's work project on the side. I, I, you know, there wasn't like a big board debate about
[00:35:30] Logan: was six people,
[00:35:31] Filip: it was five or six people. So, you know, it's like, hey, you know, they're experimenting with something. So I, I don't, I don't think there was a debate in that sense.
Um, what was interesting, and I remember this, you know, uh, by the time I'm raising my series B and C, which was, you know, both in 2019, the light bulb already went off for me, right? Like, I, I, I knew that we're going from being a camera company to wanting to be this multi-product company and wanting to build access control.
And so I start telling that story. My series B and series C pitch was all about, you know, Verkada started in video and now it's going to be this building platform. Um, and I do think that at the time, people, you know, looked at it and they nicely smiled and they said, well, you have good camera revenue, so here's a check and, you know, keep, keep going at it.
Yeah. Uh, but you know, I think in retrospect, uh, you know, I'm so happy and so glad that we planted those seeds early, uh, because as the business grew, you start capturing more and more of that, you know, kind of core market you started in. And I. You know, again, when we were $0 in my living room, 20 billion seems like infinity.
When you're doing hundreds of millions a year in cameras, you're like, wait a minute, I'm gonna sort of start reaching market size limits here. So I need my products two, three, and four to pick up enough momentum to carry the company growth, you know, hopefully for many years to come.
[00:36:48] Logan: There's a tension that exists between empowering and autonomy there, and also, um, uh, shared experience or the commonality of a single product integrated that works together. How did you sort of think about, like, it sounds like this team went in the proverbial basement, maybe the literal basement to work on this, but what was kept as the same fabric of, Hey, we're still gonna use AWS, we're gonna have the same database, or whatever it is, versus what did you empower people, Hey, if you want to use Postgres instead of Mongo.
[00:37:15] Filip: percent. Yeah. It, it was the latter, right? So it was, yep. We have some services in AWS, if you like, Google Cloud platform, you know, go, go, go to town, like make your decisions. Um. I think part of the realization we also had, and, and this certainly has continued to be true, you know, today as we build products 4, 5, 6, or 3, 4, 5, 6, um, technology just changes very, very quickly, right?
And so the best decisions that we made to architect the cameras in twenty-sixteen, twenty-seventeen, those same decisions are not necessarily relevant for this new product you're building in, you know, twenty-twenty or twenty-twenty-four.
[00:37:51] Filip: So we definitely, em empower, empowered them to, um, you know, to kind of explore and choose whatever they deemed best.
Um, you know, I think the, the pieces that, that tied it together were very simple, right?
[00:38:04] Filip: It's the same platform. It's, uh, you know, we have a design framework for how, you know, our software, which we call command, should look right. So, you know, we ask them to the extent you can try to work within the design framework, if you need to break it, break it, uh, but you know, hopefully like stay sort of within the realm, um, or, you know, very basic things like user login, right?
Like. Let's use the same user creation and authentication flow we already have. So the same user who's a camera user can now become an access user. So they were very sort of like, almost like the lightest integration and touch points that you could imagine. Um, and then, you know, generally how we've, you know, how we've done it over the years is once that product gets to market and it gets momentum and it gets iterations and you know, kind of does what the customer wants, you know, then you start thinking about, oh wait a minute, what are the co commonalities, right?
Like, where can I build an integration so that the experience feels more seamless? Right? Uh, and so, you know, we're today doing a lot of that and it's not just those two products, but you know, sort of across all six product lines, uh, we think about
[00:39:08] Logan: so, so when does that get spun back in together into more of a single integrated team? Is it at a certain revenue threshold, certain customer size,
[00:39:15] Filip: never it stays separate.
[00:39:16] Filip: So, so all the teams are separate and, and I think we.
I think as a team and as a culture, we, we very much, you know, within engineering and more broadly, we believe in this idea of like divide and conquer and, you know, kind of very clear, um, autonomy and, and responsibility and accountability for different teams. Uh, and it certainly applies to product teams, right?
So, um, you know, all of our product teams sit together. The engineers, the designers, the product managers, right? They, they work together on the product. Um, their roadmaps, they manage it themselves. They sometimes even use different tools like, you know, like our, you know, bigger team, like the camera team might use completely different workflows and tools from some of the newer, smaller teams because just, you know, kind of different things are appropriate at, at the different scale.
[00:40:02] Logan: Hmm.
[00:40:02] Logan: What about, what about the sales team? So is the sales team separate or does same people say, sell the same
[00:40:08] Filip: so the sales team to date, uh, you know, a, a seller will sell all of the products. Um, and the idea there, and you know, I think we try to take it as far as we can, but the idea there was.
Make it as easy as possible for the customer, right? So if you're a customer and you call Verkada, it's much easier for you if one human can tell you about, you know, the suite of products and how they integrate together than if you have to call, you know, Bob to talk about cameras and Sally to talk about alarms and so on.
Um, so that was the mindset there.
[00:40:37] Filip: Uh, you know, of course, you know, the challenge becomes, and, and this is, you know, a bridge we'll have to cross at some point that, you know, once you've got a portfolio of, you know, 15, 20, 30 products down the line, you know, that portfolio becomes hard for a single, you know, salesperson to grasp and understand.
But that's actually also one of the areas where I think so far we've been successful by building a software solution that's so intuitive and so simple, right? So a lot of our focus is on, you know, when you build the software, you know, I could literally add you to Verkada or send you a camera and you'd be up and running in minutes.
And that's great for the customer because you know, for obvious reasons, that's what they seek. That's also great for our salespeople, right? If you join our company, I can teach you about our products very, very quickly, and you can be coherent with their customer. Um, and you can tell that story. So that's helped.
You know, this notion of having one seller talk about, you know, all six different components. Uh, and we essentially try to identify with the customer, like what's the entry point? Where do you feel the pain? Is it cameras or is it your alarm system? Or maybe you're trying to, you know, modernize your, uh, you know, your doors with wireless access control, right?
So
[00:41:46] Logan: Do you use spiffs to incentivize sales of new products or how, how do you keep sales people from just selling more of the same over and over again? Because you, you are a market leader in physical security, and so I can imagine that might be the easiest thing to sell rather than the sixth product that just came out.
[00:42:01] Filip: Yeah, I mean, I think, you know, kind of hundreds of ideas and tactics is how I'd describe it. So, uh, you know, I think first and foremost I think of, um.
[00:42:09] Filip: Almost my, my product leader for each product area, I think of them almost as an owner or GM of that business, right? And so that, you know, that person, you know, a big part of their job is, you know, I, I think of it as almost internal sales, right?
Like the way they pitch it, the way they position it, every sales kick of like how they demo the products. Um, so they're getting that, you know, kind of share of attention, uh, you know, of the, of the salespeople. They're on also many of the calls and they're helping our sales team. Invent how to talk about these new products, right?
Because to your point, you know, we'd been selling cameras for eight years. We have a very good talk track. We know what questions to ask you. We know what questions you'll ask. We're very comfortable with that. For every new product you have to invent that from, you know, from, from the beginning. Um, and so the product team is, uh, you know, is kind of particularly helpful with that.
Uh, but then, yeah, you know, we, um, you know, from SPIFs to focus on certain product areas, you know, we've tried some overlay salespeople for particular, you know, kind of products. Uh, you know, we try many tactics to get engagement and get people, um, excited about selling the platform from the customer side.
[00:43:17] Filip: One thing that's, that's very interesting is a couple years ago, I would've told you the customer thinks about it as individual products, right? Because that's how they bought historically. Um, I think in 2020 when I launched Access Control, I would, you know, I'd be on stage and I'd be talking to a customer audience, and everyone looked at me and they're like.
Why are you launching this door product? Like fix some camera bugs. Like we have all these features we want. Uh, but we started telling that story of the integrated building and that story stuck like three, four years later now, you know, 2024, uh, we see it's more than 60% of our large customers that have two or more Verkata product categories.
And so you're almost feeling this pull from the customer. They want the integration, they want cameras that work with door locks, that work with the alarm system.
[00:44:07] Filip: Um, and what we're seeing, which is extremely exciting to us, beyond that they actually want to integrate our systems with other business systems.
And, and, and that's fantastic to me, right? Because ultimately, you know, we want to be that ecosystem. We want to be that platform. Uh, and so those are like the best early signs, uh, for me that that is beginning to happen at.
[00:44:26] Logan: The types of people that are leading these different product lines internally, have you found, um, particular characteristics that have lent themselves to people being successful as the entrepreneurs of these business units within your broader company?
[00:44:41] Filip: Yeah, I think it's, you know, frankly one of the hardest roles to hire for. Um, and I think it's, um, you know, in part you, you try to find people with the right properties. Um, and in part I think you share the learning and, and it's, you know, sort of the, um, I think the core group of us who started the company is often involved at the inception of these new ideas just to sort of share knowledge and, and it's not so much to define the new product as it is to, you know, share the foundation of how you go about building a new product.
So the, you know, the product leader or the engineering leader doesn't have to invent it from ground up. Um, you know, a couple of kind of rules of thumb, like everyone on our product team.
[00:45:22] Filip: We hire with an engineering background and, you know, strong engineering background.
[00:45:26] Filip: So, um, I like builders. If I interview you and you tell me about something that you built and I ask you details about it, and you know, I don't know, maybe you built a microphone in your past life, great.
I want to know exactly how many ohms of resistance and the thickness of the membrane and where you got the components. And if you tell me all of that, I know you don't sleep and you go to home and you think about microphones, you're passionate about it. So chances are if you start getting into it at Verkada, you'll soon know everything there is to know about an intercom, and you're gonna build the, you know, kind of best product possible.
[00:45:58] Logan: can't bullshit that level of depth.
[00:45:59] Filip: You, you ca you can't. Right? I mean, you just, you know, and I, I think this is where, you know, to this day actually, I interview every, every product leader at the company. I interview, um, you know, a lot of engineers at the company. Um, and that's what I look for, right?
It's like. It is the passion and excitement. Like you can, you, you know, there's, I think of it as there's folks who get into it because, you know, quote unquote, it's a good career and it makes good money. That that's not who I'm looking for, right? I'm looking for the person who's, you know, motivated and ambitious because they love the substance of what they're doing.
Uh, and you know, ideally they're ambitious and they make, you know, kind of a great career of it along the way. Um, but, but, but that's almost secondary. If
[00:46:38] Logan: Do you frame these roles as like almost tour of duty? Like, Hey, come in, get this going, and then if you want to go be an entrepreneur. 'cause I can imagine there's a tension of if you skew too far entrepreneurial they, they might wanna leave. Uh.
[00:46:50] Filip: And, and you know, we've had that happen and I think that's, you know, that's fantastic. I mean, I think, look, if the net result or the end result of this is, you know, many of our, I don't know, engineering leaders, product leaders or top engineers, you know, do 2, 3, 4, 5 years with us and then leave and start a company.
I mean, that's fantastic. That's like beyond my wildest dreams. Like I would love to enable that. Um, but um, but yeah, it's definitely that zero to one mindset of wanting to take risks, move fast. And, um, I think what's worked well is, you know, kind of back to your previous question about how we do it, it's that that isolation and autonomy, you know, that gives, like that's the environment that that type of person succeeds in.
Right? And, and, and, and they like it, right? Because if you, if you are a zero to one person, if you have that entrepreneur, spirit, spirit, the last thing you want is a roadmap review for the next six months with, with Philip or you know, it's like, no, like you get a room, it's a crappy room, you get some computers and some, you know, engineers go build something, right?
[00:47:51] Logan: Yep. Uh, we referenced him earlier, but Hans is the executive chairman. Yes. Which, uh, is
[00:47:57] Filip: it could mean lots of things. Yeah, I
[00:47:58] Logan: Often a title that doesn't, uh, I, I, I don't know what that means, but in practice, it, it sounds like he is extremely active. Almost. Uh, we were talking earlier, but, uh, you're, you'll stay up late. Uh, and, and he'll get up early and it's sort of like a 24 7 around the clock CEO dynamic going on.
So, can you talk a little bit about, for people that don't know, Hans was a co-founder of Meraki. Right? Which was a very successful business acquired by Cisco. Can you give, uh, I guess
[00:48:26] Filip: sort of backstory
[00:48:26] Logan: on him and then also, I mean, uh, you too were, uh, almost set up, right? Originally it wasn't like, uh. You grew up next to each other or anything, and so how the relationship came to be.
[00:48:37] Filip: Yeah. Yeah, sure. So, so look, uh, yeah.
[00:48:38] Filip: Hans, you know, built Meraki and, and, and that, that it was a fantastic business and they sold it to Cisco.
Um, I met him in twenty-sixteen leading up to, uh, the start of Verkada. And I think, you know, when I took the meeting, it was an introduction through, again, a, a fellow friend. I think we were both. Thinking about building things. I think Hans was also thinking about investing in things. Uh, and so, you know, I took the meeting because I, I'm like, wow, this guy is really smart.
Meraki is awesome. Like, uh, I, why wouldn't I meet him? Uh, so that was, you know, that was kind of the beginning of the journey. Uh, I think what we very quickly realized is, uh, we share a very similar mindset, like we think in a similar way. We're both kind of computer scientists, you know, into engineering, into, uh, into devices, into details.
Uh, and so that stood out to me very quickly. Uh, and you know, at this point I'm thinking of starting the next thing. The idea is not crystallized yet, uh, but my mindset and my reaction after, you know, I think the first time we, we probably got coffee somewhere in Palo, Alto was like, oh, this guy is great.
Uh, I would love him to be, you know, at a minimum in some Circle advisor, you know, helper, friend, something like that. So that's how it starts. Um, you know, I think how it very quickly evolves is, um, you know, a couple of friends who are daughter co-founders and I were. You know, beginning to work every day at my house and Hans starts showing up and, you know, first he shows up for a few hours and then for seven hours and then for 12 hours.
And then we're working every day, day in and day out. Uh, and you know, through that process we land on the idea of video security. Um, so that's really how the, you know, kind of relationship, uh, you know, kind of formed at the beginning, if you will. Um, and as you can imagine, it's kind of tricky, right?
Because you're beginning to think about co-founding a company, which, you know, to me it's like a, you know, it's gonna be many decades of working together. Um, and you know, we had literally just met, right? I joke with some of my friends, it's like, Hey, like imagine you just went on a date and you know, the next day you decide to get married, it's, you know, it's not too different.
Yeah. Uh,
[00:50:38] Logan: Um, and by the way, you can unwind marriages. It's much
[00:50:40] Filip: You could, yeah. It's much harder to unwind companies and, and co-founders, right? So, so, so, so I think, you know, there was a, you know, at the beginning we're trying to very quickly figure out like, how do we work together? What works, what doesn't? Uh, and we wanted to keep it flexible, which is where that executive chairman title came from.
And, and, and I think, you know, that, that, that offered us that flexibility. Uh, you know, in practice the way that this whole thing evolved is, you know, we're both super in, invested in the business. We're both spending a lot of time on it. Uh, we're co-leading the company together. Uh, and we, you know, we spend our time, we have a lot of overlap, but you know, we have areas where, you know, we spend proportionately a little more time.
I would say, you know, Hans is probably 60% go-to-market and, and, and execution on that side, 40%. Everything else, I'm probably like 60% product and 40% everything else. So there's, you know, kind of that, that kind of overlap. But, you know, any day in the office, you'd see both of us any day of the week we're talking together.
Uh, and I think what's awesome and, you know, I, I'm, I'm not sure I would, you know, I think. In many cases the like Co-leader thing doesn't work for us by coincidence, it worked fantastically. Right. So,
[00:51:50] Logan: and what do you think that is? Like, is it that your brains are working similarly
[00:51:54] Filip: so, yeah. I think so.
I think, you know, one of the things that I always candidates ask me about this question all the time, right? It's like, imagine you're an executive joining the team. Like do you now have two bosses and how is they gonna play out? And I think, you know, the answer I give, which then I think much of my team would validate, is look, because we have a similar view of the world and way of thinking, I think Ninety-five times out of a hundred, even if Hans and I haven't talked about an issue, we will likely give you a directionally similar answer.
Um, and on those rare occasions that we don't, we're very quick and very aware to, you know, kind of communicate, hash it out, uh, you know, and kind of decide like which way we want to go.
[00:52:31] Filip: Uh, but look, I think at the end of the day it's been, you know, close to 10 years and it's been fantastic and it's worked really well.
Um, so today we think of it as a superpower. It's like you can divide and conquer. You have, you know, more, uh, you know, sort of highly dedicated, motivated energy, um, to solve different difficult problems.
[00:52:51] Logan: So I wanna talk about a number of different things that I guess you guys do, uh, operating wise different than the average company. I guess we just touched on one, having an executive chairman and a CEO kind of co-leading aspects of the company is, uh, definitely a little bit unusual. But first, I guess a philosophical question about this.
[00:53:08] Logan: So, when do you decide to accept conventional wisdom, uh, versus try to reinvent or rethink things from a first principle standpoint when it comes to operating?
[00:53:20] Filip: I think we're very, I would say we're very first principle driven, but we consider the conventional wisdom, right? So I think you look at what the conventional wisdom is and what people do, and then from first principles, you think about, does this apply and should we follow that path?
If yes, great. What can we learn? And I would say, you know, we learn and borrow ideas from a lot of successful companies all the time, which is fantastic, and I recommend everyone does that. Uh, but I think in many cases, you know, you look at things and you're like, ah, you know, the world might think, you know, everything is going this way.
And, you know, we, we come up with a unique idea. Um, and in those cases, it's all about wanting to experiment, right? Like, I, I think you come up with your own idea and it's not about, Hey, my idea is better than the conventional wisdom and I have ego attached to it, and so therefore we must do it that way.
It's much more about. Let's try doing it this way and let's see what, you know, kind of how it plays out. If it's great, fantastic. We just invented something new, you know, if not, you can easily revert, uh, you know, revert back to, um, you know, tried and true
[00:54:26] Logan: is there something that stands out that you, you maybe thought about reinventing and then you're like, oh, hang on, there's a reason people have done this for extended periods of
[00:54:32] Filip: for, for sure, for sure. I mean, I'll tell you the one that we, we always joke about, right? Which is, uh, when you're a small company, right? When you're a startup, when you're 10, 20, 50, maybe a hundred people, there's a lot of, you know, you have this energy, we're like, oh, things are fantastic 'cause there is no processes and you know, it's very, we just do things and we make good decisions and, and life goes on, right?
And you make fun of the big companies. You're like, ah, like imagine how difficult it would be to get this thing done and the bureaucracy, right? And, and, and as the. Company grows up and you're like 200 people, and then 700 people are like, oh, wait a minute. Like actually, you know, a little bit of a checkpoint on that PO sign off process.
Like that might be good. So that, you know, you don't have random, I don't know, salesperson act spending, you know, $10,000 on a golf tournament or something like, you know, I'm making up examples. But, uh, but, but you just learn, uh, and then, you know, kind of going back to your, you know, your, uh, your, your, your original question, which is like, well, how do you then blend this conventional wisdom with the first principles?
I think in this very example, you know, we think about, okay, so why did we not want the process? Right? And so then you focus on that and you're like, well, you don't want the process because it makes. Painful for ambitious people who just want to go forward to do their job, right? And so, you know, that's where you come up with these unconventional solutions that, you know, hopefully tackle that specific problem.
Right? And, and, and I'll give you like a, uh, you know, kind of a couple examples of that. Uh, so, you know, uh, one, one basic one is like many companies have an IT department and you'll have an email like helpdesk at COMPANYNAME.CO or whatever. Um, and you can email and you can, you know, get your laptop fixed to your screen or whatever it is.
But it's this like big anonymous amorphous list. Who is the person who's actually gonna help you, right? So, uh, you know, once we got to the scale where we needed to build a IT function and a helpdesk function, 'cause we couldn't set up all of our own, you know, devices. We said, well, let's do it, but let's make sure that there's a human attached, um, to every piece of the organization, right?
So if you're in, you know, sales, this is your person for it, and if you're in engineering, this is your person for it, and you never email it at Verkada, you email, you know, John at Verkada who happens to be, um, you know, the IT manager, that, that might help you with your very issue. Um, and what that then results in is a lot of accountability and a much smoother process, but a process that's lighter and smoother for all of your employees, right?
So, um, so that's one of those ideas where I think, uh, you know, fall on the category where on the surface you'd say, you know, we went very unconventional, right? We have decentralized recruiting, decentralized it, decentralized human resources, um, but all of that results in a. In our minds a fundamentally better and more personal employee experience, and it allows those employees to, you know, focus on their job, do what they're good at, and like move faster and not feel overwhelmed by, oh man, I'm gonna email this.
Whatever hub desk list, and maybe three days later my laptop will work. It's ridiculous. Right.
[00:57:38] Logan: structurally, uh, let's use sales as the example. So, so there's, there's it, there's hr. What was the third one that you said? Uh, recruiting. Recruiting.
[00:57:45] Filip: think recruiting is a really good one to, uh, to do relevant.
[00:57:48] Logan: how does that work in practice where, I assume there's dotted lines that they all sort of share, uh, with the marketing department or the finance department.
Or the engineering department. But how does it, how does it actually. Work in, in practice from a decisioning standpoint and accountability and all
[00:58:02] Filip: that.
Yeah. So it's actually, uh, you know, it's actually fairly broken apart and fairly decentralized. So there's not a central recruiting function at Verkada that, you know, traditionally might work for like a people team. Instead, the department's heads have their own head of recruiting. So, you know, the person who runs recruiting for sales is completely different and independent from the person who runs recruiting for engineering.
Um, and the rationale for that was sort of twofold. Initially we thought. Well, if it's split like that, it's really nice because, you know, Martin, who's my CTO, can't ever say that he didn't meet his hiring goals because of Ryan who's running sales and hey, he was using all the power of the recruiters, right?
It's like, nope, you have a hiring goal, Martin, hire your recruiter, hire your recruiting function. However, many of them you need to meet your hiring goal, right? Like now you're fully responsible. Fully accountable, but also you have the autonomy, right? You're a smart person. You can go, uh, you can go do that.
Same thing on sales. So that's kind of like the basis of how we arrived at that. The second piece that, you know, kind of comes out of it, which is, you know, kind of interesting and, and a side effect, and it, it works really well, is, you know, if you get into it, how you recruit an engineer is very different from how you recruit.
A salesperson is very different from how you recruit someone in finance, right? Um, and so, you know, I think by breaking up the function, you've now allowed the functions to really specialize, right? And, and, and, and the activities and everything that goes along with it. Um, so the functions then get much better, um, you know, kind of at executing their job.
Um, and the same is true, you know, again, take it, right, like the, the average demands on it from an engineer are probably very different because maybe they need a, you know, uh, a desktop computer with many GPUs to train models from a salesperson, right? Who needs a laptop, which has many hours of battery life and works really well with Zoom, right?
And so you then specialize and, and, and I think through that specialization, you end up delivering a much higher quality of experience to the employees at the company, uh, which is then appreciated. And we we're obsessed about measuring. And that's, that's the other thing I would tell people is we, um, you know, for all of those functions, it was controversial when we launched it, but.
We created this idea of a neighborhood employee survey. So, um, if you're an engineering, you know who your IT person is, your lawyer, your, you know, people person, uh, and on a cadence, which is, uh, I think quarterly now, you know, we rate those functions that, that, that help you or that are your support functions.
Um, and it's fantastic, right? Because we just immediately have clear visibility into like, okay, great. Like, you know, our, I don't know, to make it up, right? Like our IT for sales is working super well and you know, maybe we have a gap, you know, in some other area. Uh, it also allows us to celebrate this functions, uh, a lot more in the company, right?
So,
[01:00:55] Logan: How do you, how do you keep from different fiefdoms forming within that that, hey, like sales is always gonna have a slightly different culture than engineering, but if they're operating this autonomously, like how do you make sure there's still that shared cultural fabric that exists within a Virkata employee?
[01:01:09] Filip: So I think, you know, a lot of it, um, and, and this, you know, kind of goes back to, uh, a little bit to Covid and, and working on site versus being remote and distributed.
[01:01:17] Filip: So we made a very big bet of wanting everyone on site. You know, we're five days a week, everyone's on site. Um, and, and we've been that way, uh, you know, for, for, for quite some time, right?
So we haven't really gone remote. I think that's really important because. It creates these opportunities for hallway chats and communication and uh, you know, kind of the casual conversations that I think you just completely miss if you're remote or on Zoom,
[01:01:40] Logan: the way, just 'cause I think that's an important point. How, how big were you at the start of covid? Uh, employees wise?
[01:01:44] Filip: I think we were maybe 250 or so employees, maybe 300 employees, and everyone
[01:01:48] Logan: was in office at the time, five days a week. And you made a decision, I mean, with some, you know, as
[01:01:53] Filip: guard rails Yeah.
[01:01:54] Logan: as you could do it in guardrails and all that.
Uh, which I, I think is probably more conventional or more people are trying to go back in that direction. But can you talk about like
[01:02:05] Filip: Yeah. What happened? Yeah. That decision.
[01:02:06] Logan: and I'm sure not every employee was thrilled, uh, with that. And so just, just before we unpack the rationale, can you just talk about
[01:02:13] Filip: this? Yeah, yeah, sure. I mean, it was a, a, a stressful couple of months and actually years, but, uh, but you know, COVID happens March, 2020, so like everyone else, we, we send everyone home, right?
Because while that's what everyone's doing, that's what the government's mandating, um. And you buy all the tools and you do zoom coffee chats and all this stuff. And you know, some of it works, some of it works better, some of it works not so well. Um, but very quickly, and when I say very quickly, I think, you know, sort of in the next two months, we realize being remote causes a lot of friction points.
And I'll give you like, you know, maybe two examples that are, that are concrete, right? So, you know, my engineering team, you know, probably at the time was a hundred people. And you know, they're pretty close. When you're a hundred people, you know, everyone, you, you, you kind of get along. And so I saw this phenomenon where people who would otherwise, you know, be friends, would go out for movies or play tennis or go out to restaurants, started talking to each other exclusively via a text chat.
I think, you know, slack in our case. Uh, and they would get into these like deep arguments, right? And it's like, it's like. Engineers are now writing essays to each other, proving each other wrong. And people who've never thought it before are now like, you know, like this, right? And, and I have to like, orchestrate calls to like calm them down and, you know, kind of like broker piece.
Uh, that was shocking to me, right? And so I'm like, okay, well that's clearly happening because like the, you know, the text medium of communication just like misses emotion, right? Like you, you know, you don't see the facial expression, you don't see how the person is reacting. Your rate of information exchange is fundamentally slower.
Uh, and so it starts causing these problems. And y you know, I could feel us turning from, you know, a group of people who wanna solve problems together and we're just stoked to build something together because it's awesome and because it solves problems to, Hey, your task is task number 2 75, please do it by Monday.
Right? That sucks. That's not how you're, uh, you're creative. And so that problem existed on engineering, um, on the sales side, you know, I think. Frankly, sales is hard, right? You make a lot of calls to customers, you hear a lot of no's. And so, you know, I almost compare it to a casino. If I gave you a slot machine to play at home, you'd play it for 10, 15 minutes and you'd get bored.
'cause you don't win. You need to be surrounded by other people who are winning. You need to be part of that success, and that's what drives you to work hard, to make more calls to refine your story. Um, and so those two things together, like it made us realize, okay, if we want to grow as fast as we want to grow, and at the time we were doubling our employee base every 12 months, which we continued to do.
Um, we have to find ways to bring people back. And so we, you know, at the time it was a very controversial decision, but we, you know, we invested in on-site testing. We put, uh, we were fortunate, we just moved into a large office, so we were able to space out desks. Uh, but, but you know, through a variety of these things and working with, you know, the county, we were able to bring people back.
Uh, and um, yeah, make sure our workforce didn't disperse. So the other thing we did. Which was crucial and paid off huge dividends in the long run was, I think at the time a lot of people had this notion that the world might change forever, and we're all going to be remote and dispersed. And we, you know, this is back to the first principles things, but we sat down and we, we fought about it and we're like, well, you know, for thousands and thousands of years, humans gathered together to do whatever they need to do, right?
Uh, and so we don't think we're all gonna all of a sudden be remote and work in our, you know, small apartments or whatever and, and, and be on calls. Uh, and so, you know, then we implemented many programs and, and little tactics to make sure that we don't accidentally hire a, you know, remotely distributed group.
Uh, and so one idea which, uh, you know, credit to, to Hans for, you know, for, for coming up with this, which was awesome, was every offer letter, which, like either Hans or I review all the offer letters. Would have a, you know, from Google Maps API a distance to the, to the employee's home address with, you know, traffic hours.
Right? So how long would it take that person to come to office, you know, in a world where you're coming to office five days a week. Right. So little things like that really helped to make sure we didn't end up in the, you know, in the situation, which I think, you know, many people are trying to revert back from now.
Um, and it paid huge dividends.
[01:06:31] Logan: And, and, and, uh, I assume you lost some people along the way that opted out of that and, and now you're getting people that are opting into this culture and so it's the trade-off's been
[01:06:42] Filip: Yeah. I think, you know, like, to be very frank, like I, you know, in 20 20, 20 21, I would get on a lot of candidate calls and, and people would think I'm crazy or we're crazy for doing what we're doing.
And they're like, you don't see the world. Um, like yeah, but that's our opinion. That's what we think works for us. So we're very transparent. Like we never, I think it was very, very important for us to. Be upfront and set that expectation to the employees. And also, like al almost became like a self-selection criteria, right?
It's like, yep, if you want to be remote, fantastic. We're just probably not the place for you. Um, and yeah, I think today it's a huge
[01:07:17] Logan: and so that, that's led to, back to the original question, less of these fiefdoms forming and more of the commonality of culture among the different groups
[01:07:25] Filip: Hundred-percent.
And then, you know, I think, you know, I think you're, you're, you're back to that question of the, the, the different parts of the company. I think when you're in office, you can also employ a lot of, you know, kind of simple tactics to have people mix and talk to each other, right? So, um, you know, uh, in our building in San Mateo, we, we moved into the building.
We decided to knock a huge staircase through the three floors, which is literally in the center of the floor plate. Um, so that employees can mix between the floors and, and kind of use that as a central point of connection, right? Um, other things we. The food we put in our micro kitchens is different than every floor, right?
So, you know, if you like your snacks on the second floor, you're gonna go there and you're gonna run into, you know, whoever works there. So there's all these little tactics, um, that I think, you know, work really well. Uh, we also, you know, I think at some point had to overcome the challenge of being a, a, a global company, right?
So today we've got, uh, 16 offices around the world. And so then, you know, part of this becomes a, Hey, only half of the employee base is in San Mateo. How do you get someone in Japan or South or South Korea or Poland or Europe or you know, wherever two, understand the company and the culture. Um, and so we also built a program of many touch points.
Every employee on boards in San Mateo for a couple of weeks, right? Cost us money, but very war it, right? You get the culture, you get who people are. Uh, you're less afraid to talk to different people. It's not the. Scary HQ that you don't wanna reach out to. Right? Like, we're always like very conscious of these things.
Um, and then we create a lot of opportunities to bring the team back together in person throughout the year.
[01:09:04] Logan: Hmm. There, there's, there's a balance that exists, and we touched on a little bit of this, but the difference between centralization and decentralization and accountability and all of that. How do you, how, how do you empower. These different departments, different teams, different product owners, in the case of new products, as they're, as they're coming out, uh, empower them, but also maintain accountability and the sense of, you know,
[01:09:28] Filip: can talk Yeah. You
[01:09:29] Logan: That at the end of the day, you're delivering a product or a service or whatever it is that you wanna stand behind.
[01:09:34] Filip: Yeah. I mean, I think, look, there is, um, like simple frameworks and, and, and, and goals and how you think about it can, can, I think, go a very long way. Um, and, and so, um.
I mean, if you think about access control as the example, right? The the door access product that we built, the second product, um, when we send that team to the basement and we separated them completely from the mothership, if you will, um, you know, Hans went and printed a giant banner, like literally, I think it was eight foot long and all said June 20th, 2020 is the launch date of access control actually June 20th, 2020 or bust, right?
And that literally hung above the team every day. And so everyone was aligned. You could not forget, you could not miss the fact that we are all, all marching to this totally arbitrary date of June 20th, 2020, uh, which is when we were going to launch that product, right? So that's fantastic because you don't have to be part of that team to understand that goal or that milestone, right?
Anyone on every team understands that. And that's great because now I. You know, the folks that are on the cameras team are not gonna distract access. 'cause they appreciate that they have a tight deadline. Uh, you know, the folks in marketing are now aware, oh crap, this thing is gonna launch. I need my materials for SKO, I need my customer stories.
You know, it's like, it, it just gets everyone on the same page. Um, you know, I think the other thing that we do, which, which helps here a lot, is we try to think of, you know, fully staffing every function in every location, if that makes sense. Right. So, um, for many of our offices, they're like sales offices.
They're fully staffed sales offices, right? So it's sales, sales, engineering, uh, you know, support localized to that region. That group of people works together and works with all those customers. They sort of share a mind state. Uh, and you know, there's like information that flows between them without necessarily requiring like a, a.
You know, big heavy process over them, right? So, uh, so that works, and we certainly do that for products, right? So if you think about, um, Intercom or whatever we, you know, uh, whatever we're, we're maybe building next, that group of people sits together. They have a clear responsibility. It's their own res only responsibility.
You know, they'll have a product marketing person. That person by name is assigned to them, only to them. They know each other, they work and, you know, ideally they have some dates and, and key deliverables. So that's, that's kind of what's worked well for us.
[01:12:03] Logan: As you think about people that have risen quickly within Bercada or been very successful, the early people in the journey that are maybe the executives there, are there, um, are there commonalities in terms of their characteristics or traits? We touched on like the entrepreneurialism and the depth that some of your leaders within different product areas can go into, but what about just other functional, uh, areas or roles?
[01:12:25] Filip: Yeah, I mean, I think, look, the, the reality of of, of, of kind of a company like ours, and I think there's many examples of this, right? We, we, we grew very quickly, right? So, so for a couple of years you're growing at two x or more a year.
And so everything is changing. And so I think that the type of person that succeeds in that environment is the person who can hold onto that change and, and, and can embrace the change. And, you know, you had this way of doing something and now you have a new way. Can you adapt to it, right? So that's generally speaking, I would say, you know, who succeeds and who excels and that takes a lot of work.
Uh, you know, it's, it's hard. It's not for everyone. Uh, but, but that's, you know, that's I think what makes, you know, some of those early folks successful. The other thing I would tell you is. As the company has scaled, uh, you know, over time you realize that, you know, the growth of the company often far exceeds the growth of the individuals, myself included, that are in the company, right?
Like, you just can't keep up with the compounding factor. Uh, and so, you know, I think there's a time and place where you say, Hey, for this function we really need someone, you know, external with a lot of experience who knows about this area. Um, and you know, I think for me, in, in my role and, and, and, and with the leadership team, you know, that's particularly critical, right?
If, if, if everyone on my team I have to think about and second guess their decisions, that's an awful work relation, right? Like, you don't like working for me. 'cause Philip is poking his finger into everything. Um, but if you hire people who are, you know, ideally a few steps ahead and have seen that scale, man, like delegating to them becomes so much easier.
They're so much more competent that executing what they need to do. They bring in new ideas. And so we've done a fair share of. Just along the journey looking for people with that broader experience and bringing them on board and, and that's paid, you know, massive
[01:14:16] Logan: I think that's one of the hardest things for any company to do is when the people that took you there aren't gonna be the ones that are gonna take you there. And it's nothing against just the, the, the slope of the line of the company is often gonna outpace the slope of the line. Individual. Is there a question that you'll ask yourself at that moment in time once you're trying to assess, Hey, is this person really gonna be the person for the next year?
Or a way that you go about thinking about making that decision?
[01:14:38] Filip: a Hundred-percent. I mean, I think, look, I think this is one of the, you know, the conversations I think we're a board can be extremely valuable. And I think that, you know, that conversation for us happens after every board meeting. We have a very quick debrief and we talk about, you know, everyone on the leadership team, myself included, right?
Uh, and then we, we talk about. How it's going and who's behind and who's ahead and you know, who's got a lot of runway in front of them and, and who maybe needs to, um, you know, bring either an advisor or a person who will, you know, ultimately run the function. Um, and so we've done the, you know, kind of the whole gamut of, uh, you know, of these things.
I think on the other side of that, what's really important, and I think I try to be very clear with my team on, you know, on this front, and I do it, you know, mainly through one-on-ones and spending a lot of time with my team is, is just limiting the ego, right? I think if everyone is, you know, steering in the same direction and wanting to build the company to be big, and everyone believes how big the company is and acknowledges that, Hey, we haven't done it at this scale yet, when that conversation happens, it becomes so much easier, right?
And, and then you can make that change, right? You can, you know, bring the, the senior person and, you know, hopefully the person who was there before in the seat stays and, and, and has a, you know, valuable and lasting role in the company.
[01:15:55] Logan: Is there something that you look back on either, uh, you know, your first business prior to selling to Chegg or, or even the early days of Arcata that you wish from an operating standpoint you could go back and tell yourself like, Hey, this thing in particular you should focus on or think about more?
[01:16:12] Filip: Oh, a hundred percent. I think, um, you know, at, at, at smaller places before, uh, and certainly this is the first time that, you know, I directly oversee a, a team that's 2000 people.
Um, I think one of those inflection points for me was, um, you know, roughly around when the company's maybe 200, 300 people. Um, and then I would for sure tell this to my younger self, but when you cross that threshold, that's about when you can't possibly interview every employee. You have to delegate that responsibility.
Um, you may be onboard every employee, which I, to this day actually, I do all the onboardings for the employees, but you don't have a tight close connection with everyone who works for you, right? The first a hundred or 200 people. You pretty much know them and they know you. And I think that's the piece, um, that I definitely screwed up around the time, which was, you know, we would hire all these people, they'd start, they'd start working, they'd understand what the company does.
But I didn't take a very active effort in how I think about my presence internally. What I say and what I repeat at, you know, all hands meetings or Q&A is with teams or, you know, how often, how many times a week do I go, you know, to dinner with a group of folks that I might otherwise not hang out with.
Right? So all of those touch points didn't exist. Uh, and I think that, you know, that created this environment where everyone's like, ah, yeah, Philip is just, you know, he's just some asshole who's running the company, right? And, and then, you know, it's, it's, it's much easier to get grumpy when, when you know, the guy running it or the person running it is random than if you have a, you know, some kind of personal connection and understanding.
And I think for me in particular, I. I'm a fairly private person, right? Like I, you know, I don't, I don't know, post on Twitter and share my life story on fa Like I keep, you know, kind of my, my information close to myself. So it's even the simple things like, you know, telling the company what's going on in my life.
Like, Hey, I like skiing i, you know, I have kids and you know, like everyone else, like, you know, they keep me up at night, right? It's just, you need to do these things that humanize you. And I think particularly at that point of inflection of going from like the low hundreds of employees to the, like, you know, close to a thousand employees, that is extremely critical.
[01:18:23] Filip: And if I, if I could go back in time and, you know, re-inject more of that, I think I would've built more broader trust early on with, with much of our employee base.
[01:18:33] Logan: we touched on, I mean, one of the things that often comes up in startups in the early days is, uh, there there's a bias to the doers and the, you know, people that sell product or build product typically. Uh, and we, we talked about how sometimes having some more of those management functionality or, or just people overseeing, uh, in different regards is really beneficial.
[01:18:53] Logan: Were there any, um, hires that you wished you had made earlier in the journey? Specific titles of people, like, I really should have brought this in a hundred people earlier.
[01:19:02] Filip: Yeah, I mean, you, you'll, you'll appreciate the story I think from, uh, I think it was our series B, But, um, you know, around then I think my board was telling me, Philip, you really need a CFO. And I had someone running accounting and you know, he's, he's great. He's actually at the company to this day and I'm like, I, I don't need a CFO.
I have, you know, uh, Tim who runs accounting is amazing. And yeah, everything is tip top. Uh, and then I remember being in a, you know, series B discussion and up to that point, you know, fundraising was so much of. Product and storytelling and customers, like, I did not have to get into any financial details in a, you know, in kind of an investor discussion at the C or the A, um, because that's just not where the conversation goes.
And so now I'm doing the, I think it was the B or the C, I don't have my CFO yet, and Tim is there in the room, uh, and he knows everything, all the details of the company. And I, I forget what the question was. It was, you know, something about revenue growth and or gap recognition, whatever it was. And you know, Tim opens a very complex Excel model and he's like, well, if you look at this tab, the fifth tab, sell BZ twenty-seven on a blah, blah, blah basis.
And he was just like, Tim, don't talk. Like we will never get the deal done. Uh, and we both laughed about it after, like, you know, with Tim, but then, uh, you know, we brought in, uh, Cameron who's our CFO and he's fantastic at that, you know, sort of dead aspect of it, right. Which is like, okay, you have different functions within finance.
You've got, I. Accounting and all of that stuff, which, you know, uh, we, we handle really well. But then we had to build strategic finance and planning and, you know, kind of the storytelling aspect of it and how do you communicate, uh, you know, kind of numbers to, uh, you know, to external parties. Um, so that was definitely one where, um, I felt, uh, like I could have done it, I don't know, six, eight months later.
Um, I think at a greater scale.
[01:20:48] Filip: So closer to today, uh, we, uh, my most recent ad to the, the exec team was, uh, was a general counsel. Um, and that one was interesting because I, I'll tell you how I thought about it before hiring our general counsel and how I think about it now before hiring our general counsel.
My thought on it was very simplistic. It was. When the, you know, bills from our primary external counsel exceed the salary of what a general counsel would be, I'm going to hire a general counsel. Yeah. And like, you know, he's gonna make it, or he or she's gonna make it more efficient. And, you know, that's kind of how I thought about it, was very, very simplistic.
Um, I think, you know, until, you know, sort of you go through a couple more complex situations or harder situations, I think what I didn't appreciate is how, how much it is the case that when you're an external counsel, your entire, you know, thesis of existence is to be like maximally risk averse. Right?
Like you're evaluating everything from the perspective of like, I want to give you advice and that advice better be right. And if it's wrong, you're gonna be pissed off at me. And you know that that's not good for me. Uh, and I think, you know, you bring someone in house and they start, you know, thinking more from the perspective of the business.
It's like, well. Great. Here's the different, you know, kind of paths that these things can go and, you know, here's your probability tree and you know, no lawyer likes to ascribe odds to anything, but you know, once you have one in house, they will, uh, and so you can start building like probability trees and outcomes and you're like, well, you know, in this case, maybe it is worth litigating because the likely outcome in that path is actually, you know, financially or from whatever angle, uh, you know, just much better.
Right? And so you, um, I think, yeah, it's one of those functions where for the longest time I just thought about it, like as a, you know, it's a support function. Keep it external, keep it simple. When it exceeds a cost, I'll bring someone in. Um, and then, you know, once we brought Bill Barry in, who, uh, you know, came from Tesla, uh, fantastic.
Right? Like you just. Like he's part of the team. He's thinking about, you know, all these problems and, and, and, and, you know, kind of in a very strategic way, uh, can, can help us make those decisions, which is just
[01:22:56] Logan: the incentive alignment is much
[01:22:58] Filip: is much closer
[01:22:59] Logan: they're on inside because they only get fired from the, if they're the. Outside
[01:23:03] Filip: Exactly. Exactly. They give you the wrong advice and you switch firms and it's, you know, easy to switch firms, but when they're in house, they have skin in the
[01:23:10] Logan: a little bit more probabilistic, Hey, here's what's most likely to happen. Yeah.
[01:23:14] Logan: Um, so, uh, there's some interesting perks you all do, I guess, to, to help build culture 3, 3, 3 program. Can you talk a little bit about that and how that came to be?
[01:23:21] Filip: Yeah, so, uh, so three-three-three full credit to our CFO Cameron. So, um, three people going out for, um, drinks, uh, after three P.M. or drinks or food, it's free, right? So that was the idea behind the program. Um, and you know, I think generally when we built our offices, all 16 of our offices around the world, we, we tried to locate them.
Sort of downtown areas or the cool parts of town, if you will. Um, and we're very, very careful about that. Um, you know, making sure that, that, that we hit the right audience. Uh, but then, yeah, we wanted to make it easy for employees to, to hang out, right? Like the idea is, you know, it's the afternoon and, you know, three people go out and, and hang out together.
Um, chances are you'll talk about something that's relevant or work-related, or you'll share ideas and ultimately that's gonna benefit us. Uh, and, you know, that's been hugely successful. What I find funny about that program or what what, you know, I think is, is, is kind of awesome and, and, and important in, in creating these things is, you know, I think predating 3, 3, 3 at Verkada, if you took two fellow employees and went out for dinner or drinks or whatever and expensed it, like no problem.
Like, we would've gotten approved. It wouldn't have been an issue. But I think putting a, you know, a name and a program and advertising it and, and literally like, you know, posters in the elevator and little, you know, things around the office. Actually, that's what mattered. It wasn't about the money, it wasn't about the budgeting.
It was about everyone knowing that this is something they can do and then everyone getting excited about it. Right. So, uh, again, it's one of those in my mind, you know, hundreds of tactics of like, how do you get the team to be cohesive? Uh, and how do you get the team to get along?
[01:25:01] Logan: Hmm.
[01:25:01] Logan: I, I, I've heard that you're obsessed with getting hiring, right. Uh, specifically on engineering, but, uh, in the people team as well. But you've, you've actually gone so far as maybe still interviewing summer interns or something, uh, uh, uh, along the way. Can you talk about, like, obviously I don't think anyone would dispute people are important to building a business, uh, but what level you, uh, will, will drill in on and why that's so important to you?
[01:25:24] Filip: Yeah. So I think, look, first I'll say hiring is like a super, super important part of the job. And I think one of the benefits of Hans and I co-leading is like, you know, a cheat code or superpower. We have like key interviews, people and I interview people, so together.
We can interview a lot of people, uh, which is, you know, which is just awesome. Um, you know, I think, uh, I think of it in different ways, right? So there's different roles that I think as, as kind of very critical. Um, so certainly any director VP, high-level roles, you know, I'll be in the interview. Um, and then, you know, there's, uh, you know, there's functions where I interview people either because I want to teach the rest of the team what makes a great candidate or help the team arrive at that conclusion.
Um, or because it's a new team, right? I think if you're talking about a new team, I'll interview everyone on that team. And, and the rationale we have behind that is, um, you know, it's the stem cell, right? It's how that team is gonna grow. If those first few people are excellent, the chance that they can attract more excellent people, very high.
Conversely, if you hire, if you create a new function and the first few people in it are, eh, very average, like a year or two later, you're gonna have a big problem, right? Because now you're gonna have a team that's. I don't know, 20, 30, maybe 40 people, if you're growing fast and if they're all average, you know, now making a change is very, very expensive, very difficult, very emotionally expensive, very taxing on the team.
So, uh, so I think any new teams, uh, you know, for sure, um, you know, for sure I, I interview, uh, you know, for engineering, it's easy. It's, it's, it's interesting. I don't, I don't interview every engineer. I certainly don't interview every summer intern. That, that, that's the volume far exceeds my, uh, number of hours in my week.
Uh, what I do do is, uh, I read the offer packets, uh, for everyone on that team. Um, as well as, you know, I, I meet most people on the product team. And what I'm essentially looking for, uh, you know, as I do that is, is I look for two things and, and then people, you know, kind of laugh at it. 'cause for interns, I will read their transcript.
Like I, I, you know, I can tell you a lot about, you know, different CS curricula, different schools. Uh, but I do it not so much because like, Hey, I'm just trying to find the person with the highest GPA. I'm trying to suss out like, are they really the person who's passionate about building? Are they really an engineer or is it, Hey, I got into an engineering because, you know, I know someone who made a lot of money being an engineer.
Right? So, um, you know, you get hints in the transcript. It's like, which classes and which sequence? How did they take them? What project did they work on? Right. Um, and then I look for hints in the, the interview notes. Right. And, you know, I think for the most part, you know, it's a cursory check, right? Like, these things come into my inbox.
It's a two three minute, I think on average two minutes read for me. I have a sort of a filter in my inbox that makes it very efficient for me. I go through many of them very fast and it's, you know, okay. Okay, okay, okay, okay. Uh, but every once in a while and, you know, it's probably like two out of every 10 or maybe Yeah.
Something like that. Um, you know, I'll read it. Um, and I just sent some notes back to the team. I'm like, are you sure? Right. And here's the three things that stand out to me, uh, you know, whatever they may be. Um, and that's very helpful because. You know, not everyone gets to see all the candidates, right. And so, like, by being the person who reads all of these resumes and making that efficient for myself, I sort of have a very intuitive and natural understanding of the bar.
And so maybe if a new engineering manager is trying to hire an intern and you know, they're evaluating it relative to whoever they met, they might not know that, you know, most other interns that we're going to hire are like way better, right? And so it's like, hey, like by the way, take a look at these four resumes, right?
Uh, and I might even forward them, you know, some of the other resumes to, uh, you know, to kind of have a discussion. Um, and it just helps the team arrive at, at, at good decision.
[01:29:15] Logan: what is something that you mentioned, like the course load and, uh, and, and you, you've learned a lot about different CS programs and like the, the sequencing of it, like what's an example of something that you've been able to tease? Z that someone really loves engineering for the sake of doing it versus someone going through the motions.
[01:29:31] Filip: Yeah, I mean, I think that, you know, the things that, that really stand out, and this is when you have a conversation with a person is, um, is for sure, you know, when they tell you about a project they did and they just go deep on details, right? It's like, I build this thing and this thing broke and this thing sucked.
Let me show you like, let me pull up the website. Like, like, I love that. Like that rarely goes wrong. And, and then those people get, get hired. Uh, many people put there on their resume or on their transcripts, like you can, you know, figure out like, okay, they worked on such and such project and you can look it up quickly.
Uh, and you know, sometimes you get an idea from that. Um, you know, I think the other thing is when you look at a transcript and you look at the role, you're looking at the mix of skills and classes that they did really well in. Um, and so, you know, for example, if you're applying to be an intern and you're going to be doing Firmware and working in C.
I would for sure want to see that you took, you know, systems and maybe compilers and algorithms, right? Uh, and then so I look at for, you know, I look at, you know, kind of those kinds of things. Uh, and then over time you start recognizing patterns. So like, you know, for schools that you see a lot of candidates from, you'll know that there is, you know, free levels of a computer systems system or computer engineering systems class.
And you're like, okay, well the, the person who's applying to be a firmware engineer, did they get an A in the, like, you know, 1 0 1 version of the class, or the 2 0 1 or the 3 0 1 version of the class? And you're like, ah, like, you know, that gives you a, a, a pretty solid idea pretty quickly
[01:30:57] Logan: I, uh, I think I, I think this was from Hans that I had heard, uh, him say this, but that he and, and you at Verkata would, would rather hire the top knife salesman, uh, or the person that's the best at selling knives than like a good software salesman. And you'd rather teach someone that doesn't know how to sell software or doesn't know how to sell physical security or whatever, how to sell it than take someone from the industry and port 'em over.
Is that something that you, you believe and, uh, why, why do you think that's the case?
[01:31:28] Filip: Well, I think, look, the, I think the reality of it is that, you know, there's just such a vast variety of talent pools and you wanna be able to tap into those talent pools. I think the other part of this is, um, our product is fairly teachable, right? We talked about how, you know, it's all software, uh, and how, you know, I think if I gave you Verkata, you would be up and running in, you know, minutes.
Um, so I think we realize that. And so if you realize that, you're like, well, which people are gonna make the best salespeople? Uh, and I think it comes down to like. Sort of the, you know, the, the very basics of, of, of, of ambition and drive and, and, and how good are you of a customer? Like, you know, those types of aspects rather than, you know, have you necessarily sold software or, you know, I think maybe even more Naïve way of thinking about it would be, have you sold cameras before or access controllers?
Man, like that, that's completely irrelevant. Uh, it's a shallow
[01:32:25] Logan: pond to be
[01:32:26] Filip: it's, it's a shallow pond to be fishing in. I think a lot of our competitors actually, you know, sell exclusively through resellers. They don't have necessarily sales teams. Um, but, but yeah, we found that, you know, tapping into these diverse pools of talent, um, has been phenomenal.
And we've, you know, we've got, you know, salespeople that come from, you know, worlds like photocopiers, two software worlds like DocuSign, for example, to medical sales, uh, you know, reps, right? So, and, and like, why do you like something like medical sales, right? Like for. Years and years. That was a very lucrative, you know, sales profession.
And so you can find lots of people who, you know, grew up in, in that environment, worked really hard, did really well, they want that to continue. And it just so happens that, that, you know, that market's becoming less lucrative. So they're looking for a change. Fantastic. Like, let's take them in, let's take their, you know, sales skills and apply them to our, you know, kind of software, uh, software sale, uh, enable them to do it and, you know, and enough they go, right?
So, um, it's worked very well.
[01:33:27] Logan: I want to back up. Uh.
[01:33:29] Logan: March, 2021. Uh, there was, Verkotta was in the news for a hack. Uh, can you, for people that are unfamiliar with the story, uh, which I, I don't know if you guys have spoken publicly about it or not, but can you, can you explain, uh, what happened, how you responded to it? Um, go into that.
[01:33:48] Filip: Sure. Yeah. So, um, so March, uh, of, yeah, 2021, we had a, uh, security breach that happened on our system. Um, very stressful day, like, by the way, to just give you the reality of it. Like, I come into the office, it's a, and it was a Tuesday morning. Um, I'm getting my coffee downstairs and I get a call and it's like, Hey, Philip, we, we have a situation.
I'm like, and so I run upstairs and, you know, I, I think we, you know, we, we essentially find out that, um, a, a, a support systems machine that we've used to, uh, you know, kind of navigate customer issues via our support team. Had inadvertently been exposed to the internet and, and, and then compromised. Um, and, you know, an attacker got, got access to some of our system, right?
So it's one of those moments where like, you know, everything freezes and the sky is falling and you're like, holy smokes. Like, what, what's next? What's gonna happen? Um, but you know, I think in that moment what's, what's really critical is, is, is kind of okay, staying level-headed and look at the facts, look at what, you know, start getting more facts, start dividing the tasks.
And, and that's kind of like exactly what, what we started doing.
[01:34:51] Logan: was it a, was it a news story at that point or did you, were you out in front of it right now? Yeah.
[01:34:57] Filip: So it wasn't a news story yet. Um, but we knew of a news outlet that was going to go live with that story within a few hours, you know, so that's what we were working with, right? Like, it's like we have a few hours of time to maybe respond to the story, maybe not respond to the story.
You know, I think what was, uh, you know, what was really helpful in that, in that moment of, of, of like that maximum stress was. Um, you know, I mentioned to you like you always try to look for other people who've dealt with a situation and learned from them. And so I, um, I happened to, uh, you know, I happened to know from, I had met him through a, you know, through a Sequoia event.
Um, we shared an Uber once, way back. I paid for the Uber and said he owes me one. Um, so I call, uh, and I'm like, Hey, dude, so you owe me one. Remember the Uber ride? You owe me one, uh, or you said you did. And of course is a super awesome person. Uh, and so, you know, you're, you know, I have the lawyers and the board members and the investors, everyone's calling and it's like the sky is falling and I call and he is like, it's gonna be fine.
Just take a breath, it's gonna be fine. Uh, so that's the first thing he says, and I'm like, right. Like, you hear that and you're like, okay, great. So like, you know, level your head and start thinking of what to do. Um, and I said, you know, I think it was the best piece of advice that anyone had given me in, in that crisis.
Um, and the advice was. No matter what you do, talk to your customers, the affected customers, and all customers as much as, as often as you humanly can. Um, and, and I think we were, you know, very, very fortunate as a company in that, you know, from the very beginning of the company, you know, we always, you know, we cared about security.
We wanted the products to be secure. We cared about activity logging, and so we built enough systems in place, um, that allowed us to have a very thoughtful, quick and measured response to the, you know, to the affected customers. Um, and so, you know, sort of within hours and certainly within days, you know, the crisis went from this, like the sky is falling and the media has like a very big story about how, you know, a hundred thousand cameras were compromised or something like that, to, well, actually, you know, the number of customers affected by this was like 2% of our customer population.
Um, and then it became a journey of, you know, talking to those customers, explaining to them. How this happened to the degree that we knew. Right. And, and then realize at the time you don't, you don't know all the facts, so you have to be very careful what, what you say. Um, and then mitigating it, right?
Putting in place a, a plan, right? So I remember, you know, for weeks, and this was also advised for weeks after this, um, you know, this, this incident, I would do a weekly customer security webinar. And, and, you know, literally the way it went would be, um, you know, I would think very carefully about what the lawyers told me.
I could and couldn't say. Uh, I would try to find like, you know, the, the perfect line through that. Um, I would start the webinar by sharing all these findings or these new things that we'd know. Um, but then I would open it on the line, um, you know, to all the customers and say like, Hey, what else do you wanna know?
Like, you know, let us tell you. Um, and, and I think what was very valuable is we. Through that process, we learned what customers really cared about. Um, and we were able to provide a response to them, which, you know, I think ultimately, I think we scored very well on the response to our customers. Most of them stayed with us, most of them transacted with us.
A big portion of those a hundred customers actually transacted with us within the same quarter because they were so pleased with how well that, uh, you know, how well that response went. But yeah, definitely, uh, you know, definitely a a, a very tough learning experience is, is what we learned, uh, you know, going through it
[01:38:40] Logan: When you're communicating with the customers and explaining, obviously you have imperfect information about what's happened, and, but you're trying to be transparent about it. You're trying to regain their trust, but not misstate
[01:38:51] Filip: Anything
[01:38:52] Logan: Uh, you also don't want your lawyers to get pissed off at you for doing XYZ thing.
Like I imagine that's a, that's a tough line for you to walk in all of that. If someone else, and maybe it's not a security thing, but a PR crisis that someone else is going through other than, you know, take a deep breath and the advice gave you, uh, do you wish you had been more public in your communication?
Do you wish that you had aired even more on the side of transparency with the customers? Do you think you threaded the needle appropriately? Any advice or takeaway?
[01:39:22] Filip: Yeah. I mean, I think we looked like we went as transparent as we humanly could. And that was advice, and that's the advice that I would like give anyone. Um, you know, I think it for us was, for me it was super helpful to talk to, like, I think if anyone's going through anything like that, find someone who's gone through something like that and, and, and that helps more than anything because you, it allows you to have a level head.
It allows you to think about it not as a disguise following the world is ending, but more as a, Hey, there's a problem. These are the components of the problem and I need to solve this problem. And one of the key objectives of solving the problem is to. Maintain trust with your customers who are ultimately your most important audience, right?
If you maintain trust with your customers, if they believe what you're saying, you know, that message like really resonated. Um, and it was like extremely clarifying in all of the decision making. It is just you go through it and, and, and, and then that's okay. If something is ambiguous, just revert back to that.
Like what would the customer want to hear? Um, and then, you know, I think you have to get into the nuance of like, okay, how do you deliver the message and you know, what's appropriate for a webinar? And like, what do you call an individual customer and say specific to them right there, there there's that nuance.
Um, but, but yeah, that, that's definitely how I would approach it. And I think in, in any context for us, I think in general I would say transparency with the audience, like really helps. Um, I think the challenge of it is, you know, I think. I remember specific details of, you know, of the breach at the time, which, you know, I really wanted to talk about and I really knew I couldn't talk about and, and, and, and so you have to then, you know, because, because essentially what you're working with is uncertain information, right?
So you're waiting for all the details to be as certain as possible before you show them. Uh, and so the hardest thing for me was like, okay, I know I have these folks on the line and I know they want to hear this one thing, which I already know, and I know it's gonna make them all feel better, but my confidence level on is, you know, whatever, seventy-five percent, not 90 yet.
So I have to wait a week. Uh, and that was a very hard, you know, feeling to overcome, I guess. But, but, but that, that's, that's that balance, right Where you have to just, okay, take a pause. I've shared enough. I think I'm trustworthy. I think you get what I'm saying, and I promise you I'll give you these next bits of information as soon as these pieces come in.
Um, and that's kind of how you navigate it.
[01:41:45] Logan: Uh, so backing up to the, to the early, early days, so you grew up in Poland
[01:41:50] Filip: Correct. Yeah.
[01:41:51] Logan: then moved to Paris, went to school in Paris. And, uh, can you take me through there to, to Stanford. My understanding is the first time you stepped foot in American soil was, uh, was going to Stanford. Is that right?
[01:42:03] Filip: Stanford? Not quite. I went to, uh, I, I got into Duke and I went for the admin weekend.
There was literally the first time I, I stepped foot in, in American soil, but, uh, that was like a two-day trip. Uh, and then I, um, I, I came to Stanford ultimately, and that's the first time I stepped foot in, um, in California. So, uh, so that's the journey. But y you know, back to your. Uh, the story. Yeah, I grew up in Poland.
Um, so born there in the north of Poland, small town. Um, uh, you know, kind of fantastic time for, for Poland at the time, by the way. I, you know, I remember the, the country just changing so rapidly, uh, right. So, so post-communist and, and, and, and kind of all the investment and all the change, uh, you know, all the change happening.
Um, and then from there, I go to Paris. So my mom's job moved us, uh, you know, kind of to, uh, you know, to France, uh, initially that it was just for one year. Um, and ultimately we stayed there five years. So I, you know, I, I kind of graduated high school there. Um, at the time we moved, I spoke some English. I didn't speak any French, so that's what landed me at the American High School in Paris.
Uh, and from there, um, you know, I applied to schools in the U.S and, and, and that, that was a journey in itself. Right?
[01:43:09] Logan: I, I heard when you were in Poland top of the class and, you know, teaching everyone, uh, like, you know, building websites for people and doing all that, and then. There was a transition to Paris, maybe around the language or whatever. Can you talk about that
[01:43:23] Filip: Yeah. I mean, I think, look, it was a, it was a good training ground is how I think about it, right? So, um, again, like in Palm, you know, I think the town I grew up in population was maybe a hundred or 120,000. So small town. Um, I go to a public school and, um, you know, I was whatever, one of the smarter kids in class, I guess, and had lots of friends.
Good, you know, kind of good, good energy. Um, you know, we moved to Paris. I think what was the reality for me was I, I had to now jump into an environment where, okay, everyone is speaking English. Um, you know, I think the reality was I was one of the few kids who moved truly from another country and went to a non-English native speaking school.
Um, so the majority of the kids in my, uh, you know, middle school and then high school in Paris were, you know, kids who had been. Traveling with expat parents or maybe diplomat parents, like their whole life, right? So this was the third or fifth international schools for them. They know the system, they know how it works.
Um, so yeah, it was definitely, you know, kind of a bit of a Adjustment for me and, and, and, and this period of like, well, you know, here I am top of the class, like life is easy and you know, I'm, I'm cruising through it to like, oh man, like I really have a lot of work to do to catch up on, you know, my skills in English, both for the academics.
But, you know, I think, and I felt the second more just for the social interaction, right? Like, I moved when I was 13. Um, the, you know, my command of the English language definitely didn't extend into, uh, the slang territory, right? Yeah. So how you communicate with, with other kids at that age, uh, was definitely challenging for me.
You know, for the first, I dunno, couple months maybe. Maybe first year.
[01:45:04] Logan: And did, did, did that experience you think make, uh, I mean, did you carry elements with that, uh, of that with you today? Like in terms of adaptability or was it just one-off
[01:45:15] Filip: I think so. I mean, I think it was a very formative experience in that, um, and I owe this, you know, 100% to my parents, right. But I think for, for years prior to that, they, you know, they helped me build my confidence and they helped me be confident the things that I'm good at, right?
And so, um, I was good at, you know, school and certain subjects and math and, you know, whatever, computers, whatever, whatever aspects. And so I think when you're thrown into that situation where, you know, everything is new and everything is changing and you know, you can't say in the right words what you wanna say to the kid that you wanna become friends with, you know, having that like solid foundation or that solid anchor in your head that, well, you know, this may not have gone the way I wanted, but you know, I'm still good at this, this, this, and that, and so I'm gonna like, anchor on that and build on that foundation.
Um, you know, I think that is, you know, that is, um, that is very helpful. What I only learned. I think about myself, like in the Verkada journey through, you know, through a coach, but I think is, you know, somewhat related to this is I tend to have an extremely level head through these different situations, right?
So, you know, whether it's, you know, I moved to a new school in Paris and you have to make friends and you don't have enough English language or it's, you know, the crisis we just talked about. Um, you know, I, for one reason or another, I have this, you know, kind of ability to just stay calm, right? It's like, okay, the sky is falling.
Everyone's sort of panicking. It's like, stay calm. Like listen, combine the facts, dissect the problems, figure out who's good at solving which problems, you know, sort of assign, agree, delegate, solve the problem and move on, right? Um, I think one thing that, you know, that helps me do that is, uh, which sometimes, you know, does result in me being quite stressed, but, but, but usually works, is I, I often try to think of like in these, you know, difficult situations, like what's the worst possible outcome?
And, you know, once I establish that the worst possible outcome is not so bad, or maybe I'm delusional and I convince myself that the worst possible outcome is not so bad, uh, you know, then you're like, okay, great. Now I'm just, you know, trying to optimize above that. Uh, and, and I think that's, that's how I, you know, that's how I deal with a lot of, you know, a lot of the challenges that, that land on my table.
[01:47:32] Logan: So, so when you got to Stanford, CourseRank did what exactly? Uh, and and how long was the journey before selling to Chegg?
[01:47:38] Filip: Yeah. So I landed Stanford and, um, you know, I, I, uh, my, one of my co-founders now and roommate back then, or dorm mate back in freshman year, um, is into computer science. And I'm like into computers but never programmed. Uh, so he basically convinces me to do computer science and I'm like super grateful for that.
Uh, so we start skiing together and doing CS classes and then both skills, like last to today, um, that's Benjamin. Uh, and, you know, along the journey, I think a year or two into it. What was awesome about computer science at the time for me was, you know, with seemingly just like four or five classes that I had taken, you could create something useful out of like nothing out of just sheer energy, right?
And so, um, I think by sophomore year, Benjamin and I had started working on variety of projects and ideas and we always, I dunno, I always liked building something that would be useful to someone like that was, I, I don't know, that just drives me. Um, and so I tried doing that, uh, a couple times, a couple different projects with him.
Um, and ultimately we got along well enough where we said, Hey, we, we like working together, so we should take a class where you get to build a project. And so Stanford has a class back then it was called CS one-ninety-four, where you build a, The whole premise of the class is you build a team and then you build a project together that's some real world application.
Um, so we get into that class and, and that, that was the beginning of CoreShrink, which was then my first startup. Um, and the idea was really simple. I mean, it was a. need-based tool for students. So, um, in 2006, 7, 8, 9, when I was in school, um, at Stanford, you'd get this book, 800 pages long, and you'd pick classes out of that book.
And, and that seemed crazy, right? You had Google and Amazon and Netflix and all these things happening. And here we are at Stanford every quarter, you know, reading this mega book that gets delivered in front of our doorstep to figure out our class schedule. Oh, wait a minute. Half of the classes that you actually liked, that you found in the book, you can't sign up for 'cause the schedule is full.
Or maybe the, you know, schedule doesn't work with some other class that you, you know, wanted to take. Right? So, uh, we realized this like class planning and picking classes is, is really hard. Um, and we thought we should solve that problem. And so that, that, that was the beginning of CourseRank and we build a tool that.
Um, essentially took in all that data from the school, um, allowed students to write comments and rate classes so you could share information and share knowledge. Um, but then you could also build, you know, schedules and academic plans. Um, and it was really fantastic because we, you know, we built a prototype in three months, in the course of the quarter of the class, and very shortly after, like hundreds of our friends were using it and getting value out of it and telling us how awesome that was.
Um, and to me that's that moment that's like, that drives me to this day. Like the most exciting thing is, you know, I'll build some feature, I'll work with some engineers on some features, and you get on stage and you announce it or you show it to a customer. Like, getting that reaction, that wow moment or that how moment.
I mean, it gets me out of bed every day. It's, it's, it's, it's just super awesome.
[01:50:46] Logan: Now, now, uh, after you sold CourseRank to CHAG, we talked about you stayed on for a little while and then you come up with the idea for Verkada,
[01:50:55] Filip: Yep.
[01:50:55] Filip: Uh.
[01:50:56] Logan: my understanding, while, while now, uh, I think Verkada is one of the, uh, best private companies growing fast, uh, you know, of a big scale, good differentiation of moats and all that.
Uh, my understanding is in the early days it, uh, it wasn't the most popular idea, uh, with venture capitalists. Can you talk about the initial, like pitching of, of the idea and maybe what you learned that would be of interest to potential entrepreneur?
[01:51:22] Filip: for sure. I mean, and I tell this, I actually tell this story at onboarding to, uh, to employees all the time. But, but you know, it was, um, it was a very sobering beginnings is how I describe it. Right. So we, you know, uh, four of us get together. We solidify on this idea. We start the company
[01:51:37] Logan: And by the way, four of you have, have, have had repeat success selling a company. And one of your co-founders was a co-founder of Meraki, which is, uh, insanely successful. And you guys were having hard times in the
[01:51:50] Filip: Yeah. Yeah. So, so the four of us, you know, we're, we get together, we start building it, and because of everything you just said, we're like, man, we're so bullish. We're like, yeah, we found this market. No one's done anything. There's no competitors. We know how to tell the story.
We've done it before. We're well equipped to win here. Um, so bullish. In fact, we put our own money into the business initially. Um, and then, you know, we were like, oh, we'll skip the series C, we'll go straight for a series A. you know, by the way, it's 2016, right? Like, money's falling out of the sky, right?
Like everyone and their cousin has a whatever multi hundred million dollar seed stage startup. Um, and so in that environment we're like super stoked that it's gonna just, you know, be a cake walk. And I think that, you know, the sobering reality was we, you know, we went to, you know, every firm on Sandhill Road.
Um, and you know, as we talked to people, I. You know, the component of hardware like really throws people off right? At the time. Everyone's, you know, super stoked about SaaS pure software, uh, you know, as a service businesses, right? So that's what everyone's talking about. We don't quite fit that mold, right?
I mean, we have a massive software opportunity in front of us. That's how we think about it. But everyone gets distracted by the fact that like, well, we have to make the camera to deliver the software. Um, and so it becomes, you know, kind of very, very, um, you know, very tricky. Um, and I remember it being, you know, kind of very tough when the, you know, when the team was still small, right?
There was this period of time, I think it was, um, early 2017 where, you know, the team is maybe 10 or 12 people. So, you know, that, that we've convinced to join. This is pre-seed, pre-funding. Um, and I would go, you know, and every day I would have some meetings, uh, you know, whoever it was. Um, and when the team is that small, no matter I.
How good I am at acting. I would come back from the meetings and ultimately it's like, so is there a term sheet? Philip? No. Tuesday. Is there a term sheet? Philip? No. April. Is there a term? Term sheet? Philip? No, we're fucked. Right? I mean, like, that is like literally the demeanor of the whole company. Uh, it was, you know, it was a, it was, it was kind of a, a tough time.
Right? And, and so, um, I mean, look, ultimately what we did is we, uh, we raised a bunch of safe notes, uh, from, from friends and, and that kind of, you know, made payroll and got the company going. Um, and then, you know, we, we went and raised the seed round ultimately, which first round read. Um, and that was a good seed run.
So, you know, I think we learned how to tell the story. Uh, and I think that was, you know, kind of very, very, very critical, right? I think, um, the facts of the business didn't change. The plan didn't change, right. But how we positioned it, like which questions and how you answered those questions, um, you know, that mattered a lot and I think it mattered more for us.
Because we didn't fit squarely into the mold of what was popular at the time. So that, that was the beginning. Uh, you know, that was the beginning of the fundraising journey, which was, uh, yeah, definitely, uh, definitely a very stressful time for the
[01:54:45] Logan: Was there, was there anything that you learned in particular from that about how to tell a story or. Or how to captivate venture capitalists. I mean, ultimately I think you're probably able to plop those numbers down in the Series B or series C. and people are like, oh wow, this is off to the races. But in the early days, especially the Seed Series, A, getting, uh, getting those groups involved, like was there something that you thought really made it click with them in a way that,
[01:55:09] Filip: I mean, I'll start from the basics, which is, you know, don't bring a box of hardware to a VC meeting ever.
Uh, like, you know, that's probably what I did on the first one and I learned very quickly like, okay, peel out and just pull out the software demo. Uh, but uh, you know, I think a lot of it was also about, you know, it's not so much about just sharing the facts as it is. You know, helping someone get on the train and get on the journey.
Uh, and, and I think the challenge is, is, you know, I think when you, when you go into a, you know, partner meeting or whatever group, you know, smaller group meeting, when you just share facts, I think people's natural intention is, or natural reaction is like, okay, well I'm gonna challenge your fact, right? And then they poke deeper and deeper and deeper into that fact until, even if you're right, they're gonna convince yourself themselves that, that, that you're wrong.
Um, and so I think one of the early learnings was, you know, help the people that you're trying to convince arrive at the right conclusions on their own, right? And, and, and so I'll give you an example of that. Like, rather than explaining to, you know, kind of a, a group of investors, like how a customer purchased or why they purchased, like connect them with the customer.
Like, yep, you know, here's a few logos, you know, John is the guy at this company. Here's his phone number. Go call 'em. Right? Like, um, and then people would make those phone calls. And, you know, they hear the customer and they're like, oh wow. Like I didn't even think of these five things and this person loves this solution so much.
Um, and so now it's more of a, you know, you're sort of leading them to arrive at the facts and the conclusions, and then you support it. Right? Then, you know, then the questions come and it's like, well, how many customer logos do you have? You know, here's a slide on it, who's the market? You know, you sort of back into it as opposed to, you know, just trying to, you know, push it into, uh, you know, push it into people and then make it, uh, make them, make them question it.
[01:57:02] Logan: All right. Well, thanks for doing this. This is great.
[01:57:05] Filip: Thank you so much.
[01:57:05] Logan: a fascinating company. You have. I'm very, uh, yeah. I'm impressed with how you guys have been able to execute, you do things in a first principles way and, uh, some elements of contrarianism, some elements of, uh, you know, rethinking the way things should be done.
So, th thank you for doing this.
[01:57:21] Filip: Yeah, thanks for having me.