Kamal: “I always believed in marrying a great product with great customer success and support to deliver those outsized returns to the customer, continue to lead these functions, but at a larger scale, right? So not just focused on zero to a hundred million in ARR, but a hundred to a billion, for example, or the other option was to expand the scope of responsibility at early stage companies. And that’s what led me to the CEO role”.
Ankur: Hello, everyone!. Welcome to another episode of zero to exit. This is Ankur and Neelima. After 22 episodes into the show. One of the things we have figured out is that the time it takes to get a guest on the show, is directly proportional to the number of exits the guest has had it’s For this reason, it took us a while to have today’s guest on the show but we are so glad to have him, finally. We’re really excited to have Kamal Shah on the show. Kamal was the CEO of StackRox which was recently acquired by RedHat. On a very successful acquisition, he now runs the cloud platforms at RedHat. Prior to StackRox, Kamal ran products and marketing at SkyHigh Networks and was a leader in CASB (that was acquired by McAfee for a large sum).
And just prior to that, he ran products and marketing at ClearWell Systems. He’d been a leader in e-discovery that was acquired by Symantec. Kamal got the golden touch. He has the unique combination of the product and marketing chops that helped him build and sell category leaders. In today’s show, we’ll talk about category creation, transitioning from an operator role to a CEO and the future of cloud and container security.
Hey Kamal. Welcome to the show!
Kamal: Thank you so much, Ankur and Neelima. Thank you for having me on.
Ankur: Yeah, we’re so glad to finally have you. I know it’s a super busy season for you, but I want to kick us off by asking you, first of all, congratulations on the acquisition. The ink is barely dry on the acquisition, super happy for you and the StackRox team. And obviously for redHat, you know, you’ve been part of obviously both the physical and virtual acquisitions, love to hear from you, what’s the MNA experience, like, in the virtual world?
Kamal: Yeah. You know, we closed the transaction officially on February 22nd. So it’s been two and a half months and the integration and the transition has been going on very smoothly. As you know, MNA is a process and going through it virtually certainly has its trade-offs, right!. On one hand, video conferencing is very time efficient and, and very comfortable as I was in sweats most of the time but on the other hand, you do miss certain in-person interactions such as getting to know each other or communicating and celebrating with the team. But on balance, I would say that it was remarkably smooth and efficient.
Ankur: Yeah, love it. Have you set a date for a physical party or it’s been all virtual so far for the team?
Kamal: It’s been all Virtual so far, but I’m hoping that as more and more people get vaccinated, we’ll be able to get together in person, over the coming months.
Neelima: Great. So I wanna start by asking you some questions on category creation. At Clearwell, you were instrumental in creating the e-discovery space. At skyHigh, you created CASB. We all know category creation is super hard and we also know that at least in the security world, you can make big bucks by just selling better mouse traps.
So first question there, why create a category and not build something incremental?
Kamal: Yeah. So, you know, you are certainly right, that there are plenty of vendors that drive innovation, or as you said, build a better mousetrap in existing markets. Right? So recent examples are CrowdStrike in the ADR market or ZSCALER and the secure web gateway market. Although these markets have also expanded to XDR and sassy respectively over time. And frankly, if you think about security and what’s happening in security, it’s no different than what we have seen in the broader IT market. But Salesforce is placing CBO or work data space in PeopleSoft and service novel BMC software and so on. Right. And so know at the same time that there are new problems that need to be solved, driven by new technologies and then the examples are mobile and cloud,
And personally I have always been interested in tackling new emerging problems versus tackling existing problems with a better mousetrap. So, it’s really a personal preference and both provide opportunities to make a difference in the world. And I would say that, like, it wasn’t me, it was a team that really created these categories and I have been very fortunate to work with some extraordinary individuals and be part of a team that made E-Discovery, you know, reality in a big market and today, or CASB, which has not evolved into other markets and with Container and Kubernetes security at StackRox.
Ankur: Yeah, one of the questions I had for you on that, was when you were at SkyHigh, obviously, we used to compete back in the days and got our behind kicked a few times. But like every time we’d be at RSA, SkyHigh would have the biggest booth, the biggest marketing presence. So, one of the questions I have, like in the process of category creation, right? Like you gotta get your word out there, and really spend a lot of money, basically. Just ARPR all kinds of stuff. Like How do you balance that versus preserving cash? What are,like, some of the three, five things you’ve learned in the process of creating these categories? Because, the way you described it sounds simple. Everybody should do it, but then people are not because it is inherently a hard thing to do.
Kamal: Yeah, it is hard. Category creation is hard for several reasons, right? One is you’re solving a new problem. And with all new things, it takes us humans time to fully understand these new ideas. Right. We create cognitive references for things. And it’s hard for us to look for that white space in our brains to fully understand new ideas.
So this is particularly challenging in security as security professionals, as we all know, are swamped solving existing problems. So the first step is really to fully understand that new idea, the new problem. And then once we understand that problem, Then we look for validation, right? We look for validation from peers, from the analyst community and from other vendors or competitors. And then finally, once we get the validation, then we look to answer the “why now” question,right as a buyer, is this something I need to solve today? or, wait till next year, Do I have a budget for this? Do I have resources? Because oftentimes it’s budget and resources get set a year in advance, right? It’s for all these reasons, category creation is hard and it takes time and therefore making investments and, how and when to make those investments also, is a difficult and challenging problem to solve. And it is, you see, if you think about it, you have to start with customers who are early adopters and well-respected by their peers, because that’s an important step in the buying process for a new category.
Having the analyst community aligned with that category is important. And as you know, when you’re working with analysts, they have to hear the need to solve this problem from their client. Right then I’m just going to listen to a vendor who says this is important and then having like-minded competitors is important. And, and you mentioned the CASB and in that space, there were several companies that were eventualizing the need for it. Right. Like, SkyHigh, CipherCloud, Netskope, Elastica, Adallom, CloudLock and Bitglass. So, given that, what we were at sky high, the decision that we were thinking about, or the considerations that we were going through from a go-to market investment standpoint is that the category is forming and the people are buying and there is a need for it. And so given the competitors in the space is now the right time to invest significantly in sales and marketing to capitalize on the market opportunity. And that’s kinda what led to, you know, the investments we made in marketing and the big booth at RSA and so on and so forth.
But at the same time Ankur, I’ll be honest with you. I have made the costly mistake of investing heavily in sales before I invested in marketing and before creating demand and that led to a very poor sales efficiency in the early days, right? So it’s always a balancing act about when do you invest? When do you not invest? And you can be right every, you know, you won’t be right a hundred percent of the time, but you have to play certain bets and then reevaluate on a quarterly basis to see and learn from the market and where the market is, and then adjust your investments accordingly.
Neelima: Kamal are there any stories around that mistake? That would be interesting for our listeners to hear.
Kamal: Yeah, without getting into too many specifics. What we saw is, oftentimes, I speak for myself. I had happy years. Right? So you see validation of the problem statement. You see customers saying, “Okay, if you’re going to move to a POC”, and then based on that feedback, you say, okay, the market’s happening and so let’s go, invest heavily in sales. And we did that. And then what we realize is, just because we did a POC doesn’t mean that you’re going to close a deal, right? There are budget constraints, there are resource constraints. And so we didn’t lose those deals, but the POC to close conversion rate was low in the early days and oftentimes it is low when you are early in that category creation. But if you, based on the early signs of first meetings in POC, are based on the early part of the sales funnel. If you make investments in sales, you’ll realize that you have a lot of activity, but it’s not converting at the rate to get to the sales efficiency that you’ll want to deliver right!
It may be okay to do that. And you may decide as a company to say, it’s okay to have poor sales efficiency in a year, one a year or two, and we will. It will improve over time, but it’s costly. Right? And then you have to make that trade-off. Now, in today’s environment where valuations are all time high and capital is abundant, that trade-off may be the right trade-off for a company, or in some cases it may not be. So it’s really, it comes down to the individual company, the individual market. And, what’s the best decision that the company and the board feel will deliver the best outcome.
Neelima: Right! So,did you need to pivot like, so let’s say you started the marketing story after this. Was there ever a pivot in startup journeys, which like initially you thought this is where we are going, and then you literally had to pivot and change your story even though addressing the same problem. Were there any scenarios there?
Kamal: Yeah, and I wouldn’t say it was a pivot, but it was more of an expansion of the story based on feedback from the market. So, let’s talk about SkyHigh for a moment. You know, we started off focusing on Shadow IT, Ankur! You’ll probably recall those fun days. And after focusing on Shadow IT, what we noticed is that the market adoption for Office 365 was going through the roof.
Right. And, and people focused on, okay, if you’re using Office 365, migrating to Office 365, how do I protect my data? How do I make sure my DLP policies extend to the cloud? How do I make sure that you’re not sharing data to personal email addresses, which could be a violation of compliance policies and so on.
And that led to a sanctioned IT story. Right. And, and doing security for sanctioned IT, focusing on Office 365, and that expanding to box and Dropbox and so on. And so, it’s more of an expansion which naturally happens where you start with a particular use case, and then you expand those use cases to cover additional use cases.
Similarly, at StackRox, we started focusing on containers and then we expanded to focus on Kubernetes because we saw a rapid adoption of Kubernetes as the de facto orchestrator of choice. So again, Neelima, it’s not a pivot necessarily, but it’s just the expansion of the product or the solution suite, based on response to them from the market.
Ankur: Got it, before we go off of the category creation, a couple more questions. So one of the things that you can validate it, that was in SkyHigh’s playbook, was a customer referenceability, basically it was baked into the contract, how important it is to ensure that the customers that you land are referenceable, that you can market them because in security there’s a lot of secrecy.
But you guys figured out early on, like I got to have these reference customers, how important it is?
[IMPORTANCE OF CUSTOMER SUCCESS]
Kamal: So I think for any early stage company, customer references are extremely important. And so I think there are two elements to this first, from a company standpoint, you have to create a culture of customer success. And both SkyHigh and StackRox, whose one of our core values was, customers come first or, going above and beyond to exceed customer expectations, right?
So this is extremely important. And that extends to not just delivering the product that delivers value to the customer. We’re making sure that it’s successful, they operationalize the use cases that are important to them. And so, “I always believed in marrying great product with great customer success and support, to deliver those outsized returns to the customer.” So very early on at both SkyHigh and StackRox. We invested heavily in making sure that, once it was done with a product it should also have a strong customer success and support teams.
[IMPORTANCE OF CUSTOMER REFERENCEABILITY]
Now, referenceability becomes important because again, as I mentioned earlier in the category creation, when you get to the early majority, right? The bulk of the market and the late majority, they look for those validation data points, right from the peers. And these are the early adopters and having those early adopters, serve us references, is incredibly important and not everybody will be publicly referenceable, but even if they’re privately referenceable that’s okay.
So you have both, a combination of public and private references. And then in terms of, how do you get them to be referenceable for security, where they want, they don’t necessarily want to disclose which tools they’re using from a security standpoint. And I think one of the areas, one of the ways you can overcome this, is by enabling a story where it’s not so much about, “Hey, we are securing the enterprise”, but it’s more about “We are enabling the enterprise”. We are accelerating digital transformation. And so it’s the message that you’re communicating, which is a positive message. Right? So one of the CIO’s, who was early customers of SkyHigh, he used to talk about CASB as enabling him from going from a… see I know. So, you know, you can use this solution to like, Hey, we are going to enable businesses to use whatever tools they want to use while providing the security layer. So it becomes a very positive enablement message as opposed to a security message.
Ankur: Love it. one of the other things that I also wanted to ask you is that, in the process of category creation, right? Like you have a couple of options, come up with your favorite, two, three or four letter acronym and call that a category and let everybody else kind of follow that. Or sort of, let the Gartner, which obviously has an outsize influence in our industry attached to one of the four letter acronyms that they’ll come up with and then just say, “Hey, look, we’ve got the best solution in this one”. How should somebody think about the -trade-off between the two options?
Kamal: Yeah, that’s a great question Ankur and certainly something that I wrestled with in the past. But what I found is that there’s a process that the analyst community goes through internally to come up with that acronym. And yeah, and it’s not as simple as one analyst coming up with and saying, okay, we’ve got to call this thing, you know, XYZ. They internally go through and they debate what the right name is, with other analysts in adjoining spaces. And they want to make sure that the name that you come up with is not gonna create any confusion with the other categories that are out there. Right. And because that confusion then creates confusion with the end customers. Right. And nobody wants that. So there’s a pretty thorough process they go through internally. and this is the majority of the analyst firms from what I understand to come up with that name. So, once they come up with the name, it’s very hard for a vendor or a startup to go and change that name, no matter how hard you try. Right? And so in some ways, and if you have multiple vendors in the space that everybody’s going to have their version of the three letter acronym, a four letter acronym, and that, how do you decide between, so I have found that, even if the acronym is not perfect or the category name is not perfect, going with what’s already been written about by the analyst community, can work. I mean, that’s what we did. Right with CASB, I mean, Neil McDonald wrote the seminal paper on CASB at Gartner and it was a category that was well-defined similarly,you have similar categories in the container and Kubernetes security space, but CWPP, and CSPM, and just embracing that, the early days can be efficient.
Now, when you get to it, there isn’t a category, Already that exist. Then you have the opportunity to be able to, to work with the analyst community, to influence it and to come up with the want, with the right category and kudos to Palo Alto networks for doing that with next generation firewalls.
Right? So there are examples where that can work if that category does not exist, but if it exists, then you are, I think, as a startup, it can be a very efficient path to embrace that as you try to create a new one.
Ankur: Isn’t there a danger in that though,Kamal? Because the analyst will put the sum total of what all vendors do in that category. So everybody’s chasing everybody else, which is, I suppose, good for the customers, but the vendors are losing their shit over this. Like, Oh, I got like now I got a face and Like these five are the features that I had no plans to do. Do you think it’s good or bad or that just, just how the world works and people must embrace it?
Kamal: Yeah, I think that’s, in some ways that’s how the world works, but I think, you know, if what the analysts say was the end all be all in a buying process. Then nobody would sell anything, make any revenue outside of the leaders in the quadrant. But the reality is that every company that’s in a magic quadrant, regardless of whether our leaders are challengers, visionaries, tends to have revenue that tends to do well.
Because not every vendor is a leader. And so I think it comes down to. Have you gone through a sales process and how do you work with the customers to understand, “Hey, what are your top use cases that you are trying to address? What are you going to operationalize over the next two or three years?”
Let’s focus on that versus this long test checklist of features, which you may or may not use. And then use that as a way to drive the proof of concept, a proof of value and use that as a way to drive the decision making process. So I think that it’s certainly challenging. And not all features are created equal, So if you focus on features that are really driven by priorities from customers that even though you may not have all the features you’ll do quite well, because you’re really, truly addressing a customer’s pain point.
Neelima: To that point, I’ve, we’ve also seen Gartner changed their mind. Right? CASB started as a category, then it was not a category. They couldn’t make up their mind. We saw that in solar as well. And then the tan side has changed(22:10). So there are just so many moving targets that happen with that. But, yup!.
Kamal: Exactly. And these markets are evolving so quickly. They’re changing so rapidly really that even if a quadrant comes out in three months, it’s out of date. Right because you are constantly adding features is no longer a six or nine month sales cycle. You know, you’re delivering a new release with new capabilities every two or three weeks now, if not faster.
And it’s so even these feature comparisons, right. You can become out of date. So I feel that the industry is changing. and what I’ve come to also appreciate is peer reviews and peer feedback, right? So Gartner, peer insights or G2 crowd or TrustRadius and feedback from end users. On the product and on customer success and support becomes extremely important and would be a beginning to see that those reviews are being heavily relied upon. In addition to analyst reports as customers make buying decisions. So, I don’t know if you see that and, but you certainly see that as becoming an important part of a to go to market motion. Yes.
Neelima: Totally. We see that as the consumerization of enterprise is happening. Well, we definitely see that. And we also see the users having a say a lot in buying the products, not just the buyer. Yes, for sure. Okay. So, I will move on to your CEO’s story. You joined StackRox as their CEO, not too long after leaving SkyHigh.Was being CEO, always your aspiration or something you grew into?
Kamal: Yeah. You know, one of my favorite books is “Mindset” by Carol Dweck. And I don’t do it well, but I try to continually grow both personally and professionally. And so, you know, after leading products and marketing at Clearwell and at SkyHigh, I wanted to continue to grow in my career. And as I thought about it, the two options that I could think of for
A)Continue to lead these functions, but at a larger scale, right? So not just focused on zero to a hundred million in ARR, but a hundred to a billion, for example, or the other option was to expand the scope of responsibility at early stage companies. And that’s what led me to the CEO role. And I was very fortunate to be introduced to the StackRox opportunity by RF at Sequoia.
The team was super impressed and convinced of the market opportunity, which was driven by the shift to microservices, containers and Kubernetes, and that’s what led to the CEO role.
Ankur: Very good. What is the biggest mind-shift you had to undergo from an operator role to now? Like you gotta have you got to conduct the orchestra.
Kamal: Yeah. You know, I’ve been very fortunate to learn from two incredible CEOs Aaref Hilaly, who was a CEO at Clearwell and then went on to be partner at Sequoia capitalized novel partner at Bain Capital ventures, and Rajiv Gupta at SkyHigh networks. You know, the both are dear friends and mentors. And so I honestly felt that I was as prepared as one can be. That said, the biggest adjustment that I had to make is being able to constantly context, switch and make decisions quickly. I mean, you touch all aspects of a business every day and you feel like your calendar. You know, there’s HR sales, marketing, business development partnerships in product engineering, customer success, customers, you name it, right.
And you have to context switch. Within minutes, to focus on, you know, the topic at hand, and then you have to make decisions multiple times a day across those different areas. And so that to me was the biggest adjustment that I had to make.
Ankur: Love that. And actually, I was going to ask you that same very question. Like how do you prioritize? Because, BizDev, marketing, sales, CS, product engine(26:50), and everybody wants a piece of you. You know, how do you ensure that you are focusing on the right things, the important, the urgent things, and delegate the rest? Is it just something, you know, are there any playbooks for this? Or you just, kind of, learn on the job?
Kamal: It’s really hard to answer “Do you have a playbook?”, but I have a framework that I have used. so like the reality is you’re gonna end up spending time across the board. The question as you’re asking, Ankur, is how do you, where do you spend more time? Do you spend, Well, relative to other areas, right?
And so to me, you know, there are certain things that you have to spend time that’s always important, they should always be at the top of your list as a CEO. And in my humble opinion, you know, those are people, culture and recruiting, They are extremely, extremely important. And because they really touch everybody in the company and they can have outsize returns. Right? So that to me is a constant. And I often think about how much time am I spending every week on those areas like I used to have, and I still do at least three skip-level conversations every week, with team members and, Just to kind of understand, you know, how are they thinking about the company?
What are they working on? And, you know, and asking some very basic questions like, what can I do to help them to be more successful and more effective? Right. And so it’s not about talking to them to understand what they’re working on, but understanding how you can help them? What can you do to make them more successful!, Right! Remove an obstacle and make a decision whatever the case might be.Beyond that, what I’ve tried to do is to focus on what are the top three priorities for the business and those change from month to month and quarter to quarter. So having a clear sense for what are the most important things for the business this quarter, and then making sure that you’re spending a good chunk of time on those priorities. And for that matter, not just you, but also your leadership team, Right. Becomes important.
Ankur: It’s interesting. You should say, you know, the number one thing is people, culture and recruiting. You know, is that like too often say like in startups you’re always in war time. There’s always a customer churning. There’s always a deal you gotta make to finish a quarter. How do you keep that perspective one when you’re constantly in wartime mode where you have to ask your people to work on the weekend. And sometimes we’re a little bit standoffish because now the full Claude(29:33) is a startup in Silicon Valley is, I mean, you see hard-charging CEOs and entrepreneurs.How do you not lose perspective given that you’re always in war time and startup world?
Kamal: It’s a good question. What I found is that you can always be doing more as a startup, right? You could always be growing faster, you could be recruiting faster. And so, having some perspective to say, this is what we are trying to do. And, and having some sense of balance, I guess I would say that what I’ve tried to think about is, you know, it’s a marathon. It’s not a sprint. Burnout is a real issue, particularly over the last 12 to 15 months because of the pandemic. And so knowing that, there will be time to work at weekends and charge, and work hard, but also.
Having some form of balance and encouraging people to take a break and take time off becomes important. And, and it comes with having a long-term perspective and saying that, “Hey, look, This is, you know, we’re going to build a meaningful company here that makes a difference in the world and let’s keep that in mind and work towards that.
I would also add that you know, one of the things that I’ve found, And everyone talks about this, right? Everyone says that being a CEO is a lonely job, but you really don’t know What it means until you are in that seat. It is a very lonely job. And having a coach or a mentor can be very, very effective and very helpful, I should say.
So I joined 10X CEO when you work with a coach and you are in a group of CEOs who you can lean on for advice, for support and that was extremely valuable for me. And I highly recommend that.
Ankur: What was that again? Kamal? CEO support group kind of thing. Because sorry, I never heard of that before.
Kamal: Yeah, it’s called 10X CEO. And if you go to 10xceo.com, you’ll see it. They have, you know, CEOs from some of the leading companies that you hear about today, like Outreach, HashiCorp, DataBricks, and what they do is based on the size of your company, they put you in a group of relevant peers, because the idea is that you will be facing similar issues, similar challenges, right, based on the size of the company and you can seek advice from them, right? These are fellow CEOs who are going through and experiencing similar, shared experiences as you. And, they’re brutally honest with each other and provide feedback and guidance and support to each other. And that they also assign you with a coach who works with you as well.
And I think the combination of the two is very effective and I certainly have benefited tremendously from that.
Ankur: Yeah, not everybody gets to have a Bill Campbell, so it’s good to have that kind of support group.
Kamal: Yeah, yes, yes, indeed.
Neelima: Does the coaching also help with the personal journey? Come on because yes, the peers will help us with the operational aspect, but we all come from product background, moving from product to see you, as you said, is a big personal jump as well.
Kamal: Yeah, so I think that coach was extremely valuable and, being a great sounding board, helping you think through it. And then of course, you go through multiple highs and lows every single day. And as you were mentioning earlier Ankur!, you know, you lose it.
It’s a deal, you’re trying to close that candidate, somebody quit. So these highs and lows happen multiple times a day, and it helps to have perspective and that’s part of the journey. And, you know, don’t take your highest too seriously and don’t take your lowest too seriously.
And you know, as long as you are directionally moving, making progress, that’s really what matters at the end of the day.
Ankur: Yeah. And it’s really encouraging to see a lot of the “up-and-comers” CEOs and the very successful ones seem to have that psychological aspect down. Like you look at Toby Lutke from Shopify and Square’s CEO, obviously, Jack Dorsey is a Zen ,master himself. So I think it’s possible to manage psychology as well as kind of doing this, but, really having a sounding board, goes a long way. Yeah!
Kamal: Yeah. And with the coach, because they have seen this movie through different-different CEOs, it’s always refreshing to hear a look. This is not the end of the world. Let me tell you three other examples, right!,without showing any confidential data or without sharing names. And so. Sometimes it helps to hear that to kind of say, okay, it’s you know, this too shall pass.And you focus on tomorrow. Yeah.
Neelima: Totally. so we’ll continue with StackRox’s journey. StackRox just had a very successful exit when it was acquired by RedHat. And Twistlock was acquired not too long ago by Palo Alto networks. What’s making container security such a hot market right now?
Kamal: Yeah, this is. This is going to sound like a StackRox pitch and apologize for that, but it is truly reflective of what is happening here. So, Martin Driessen(35:06) famously said that every company’s a software company and there is a fundamental shift that is happening in the way we write applications. you know, you’re shifting from monolithic applications to cloud native architectures with microservices containers, orchestra to Kubernetes.
[TAILWINDS AND IT’S VITAL ROLE]
And if you look at CNCF data, you know, Kubernetes is now used by 91% of organizations and 83% of them are using it in production. So it’s no longer just in a test bed. And that shift is what’s creating the tailwinds for container and Kubernetes security. And, and I can’t stress enough, the importance of tailwinds when you are in a new category, like even in the CASB world, Ankur, the tailwinds for us were a rapid adoption of SAS, right, which led to Shadow IT and then for sanction IT was really the rapid adoption of Office 365, right ,where the CIO makes the decision to go. We’re going to move to Office 365.
And then all of a sudden security is like, okay, we gotta sell, you know, security for office 365, right. And, or collaboration tools like box or Dropbox or Slack. And so I often look for tailwinds that’s going to propel the market forward because as a startup, there’s only so much you can do, right. But these tailwinds have mega forces.
And a very smart VC once told me about the importance of tailwinds, like, you know, you could have the America’s cup boat, but without any tailwinds, it’s not going to go anywhere. Right. And, and with the right tailwinds, even a dinghy, will fly, right. So, that’s the importance of tailwinds. And, and I think it’s really those tailwinds, Neelima, to answer your question, that’s really driving the growth in containers and Kubernetes security.
Ankur: Yeah. Yeah, there’s a tailwind. All right. You know, I mean, recently you’ve got several new startups, obviously, in addition to all the MNA, like Wiz, Orca, Lacework getting billion, $5 billion valuation, ungodly amounts of money, some stuff that we haven’t seen before. What’s your overall perspective on the market?
Is this Good for the industry, that is, the froth is going to be there and then things will settle down? But it seems like a new game altogether, one that we are not familiar with.
Kamal: Yeah. Like I’m not an expert by any means. but it is clear that the market is frothy. Right. And it appears as I speak to friends in the industry, it appears that it is driven by two, at least two factors. There may be other factors that play here.
[FACTORS AFFECTING THE MARKET]
Factor Number one is really that public valuations are at an all time high.
Although the NASDAQ has sold off about 30% from its peak, I think in the last few weeks, its public valuations are crazy. And that’s filtering down to private valuations.
And the second is what I’ve heard folks refer to as the Tiger Effect where hedge funds like Tiger Global are investing in series B and series C rounds as opposed to D, E and F rounds. Right? So they’re moving early and they are investing, writing big cheques and they’re driving, you know, at high evaluations, right? So. That’s really, I think it was a couple of factors that play and there may be others that have played. And you know, you’ve seen this movie before, with valuations being crazy and they will eventually return to some sense of normalcy.
Now, I don’t know what the new normal is, but, Yeah.
it feels like it will come down to some sense of knowing reality. And in the meantime, I think it’s very smart for entrepreneurs to take advantage of this market and build the war chest with little dilution. And so, that said with Wiz, Orca, Lacework Aqua, cystics sneak(39:25) all sitting at over a billion dollar evaluations.
It will be interesting to see how many of them are able to, you know, go public and deliver a meaningful return to their stakeholders.
Ankur: Yeah, fun, fun story about Tiger Global, another dimension. Somebody told me that you know, about right somewhere that it was named tiger because their founder, uh, was really lousy with names. So he used to call everybody a tiger, like, Hey tiger. Hey tiger. And then ended up naming the, but yeah, definitely outsized influence of the private equity hedge funds in our market.
Kamal: Tiger moving to B and C rounds. Right? So then you have those growth investors who are now saying, okay, we need to do A’s and B’s, and then you have early stage investors saying, okay, we need you to do C’s. And now the C’s investors are doing pre-C’s..(40:00)
So, it’s just creating a ripple effect in the entire market.
Neelima: Totally on a related question. Gartner recently published a paper attempting to describe convergence of this whole bunch of CASB, CSPM CWP. What’s your take on that? Will there be more froth or actually will it die down?
Kamal: You know, convergence as I think about convergence, you know, I think about putting myself in customer’s shoes. Right? So as a CSO, I mean, your TOK surface(40:40), it’s constantly evolving and expanding, right with DevOps and the pace at which companies are driving innovation. I want to drive innovation in the market.
You have more tools, more alerts than you know, what to do with and, and you’re trying to make sense of it all. So I think some form of convergence is inevitable. And I also feel that, you know, whether that’s all these, different markets coming into one or a subset of those is TBD, right. As we, as the market evolves, I also think that security will become more decentralized. So we are already seeing this with DevOps, right? DevSecOps, where developers are taking responsibility for security of their applications, you know, much like they have responsibility for performance of their applications. Right? So shift left security is real and it’s much needed.
And I think we’ll continue to see that, in other areas of the market as well,
Neelima: Got it.So asking you the last question before we go into the rapid fire, You’ve done product marketing, ran a company. And by all objective measures, have had a very, very successful career. Having said that, what would you do differently knowing what you know now about having a much more successful and fulfilling career?
[HOW SHOULD ONE LOOK AT HIS/HER CAREER SIDE? AND WHAT SHOULD BE ONE’S GESTURE TOWARDS MILESTONE ACCOMPLISHMENTS?]
Kamal: I’ve been very fortunate Neelima to owe a great deal of gratitude to, to my former colleagues, current colleagues, my family who had provided me with advice, guidance, encouragement, and support over the years, my one, one advice and it’s not so much about being, having a more successful career, but my one advice would be to enjoy the journey. You know, many of us, myself included, we’re very focused on achieving one milestone after another milestone. And as I reflect on my career, the memories that are fondly recall. I’m not of the milestones that I accomplished, but of the journey, of the moments you experience every single day .To me, it’s, it’s enjoying the journey and that, you know, would be an advice for our listeners today.
Ankur: Thanks, Kamal. That brings us to our final session, we call rapid fire as we got a few quick questions that we’d love to get your perspective. Are you ready for this?
Kamal: Let’s do it.
Ankur: All right! What’s the biggest SAS or security category that has not been created yet?
Kamal: Workflow platform. So next gen workflow platform. So we’ve seen the first advent of that with RPA tools, but they’re automating basic, not basic, but common workflows. Yeah, I think there are a lot of, there’s a long tail of workflows and an organization where there’s an opportunity to to automate them.
And I think there are a couple of interesting companies that I’ve heard of recently that are tackling that problem. And I think that will become huge, as we look to drive the next wave of productivity.
Ankur: Love it. This is close to Neelima’s heart as well, I’m sure. She’s glad to hear that. All right.
Ankur: All right. What’s your prediction for the security market in the next three to five years? More specifically, do you see more fragmentation or consolidation? Are we still going to have like 3000 to 5,000 vendors or you think it’s going to shrink?
[A BRIEF PREDICTION ON CONDITION OF SECURITY MARKET IN THE NEXT 3 TO 5 YEARS.]
Kamal: I think going to be a combination of both, I think we will see consolidation in the market for sure where larger players continue to buy emerging companies. At the same time, there will be many more new startups entering the market as well. So the total number of companies may stay the same or may increase, but there will be a lot more consolidation as well.
Ankur: Okay, love it. Yeah. You recently tweeted about reading “Think Again”, a book by Adam Grant. From the book or in general, what’s your number one hack to keep learning, to have that growth mindset.
[A HACK TO KEEP ONESELF ALWAYS LEARNING AND GROWING..]
Kamal: It’s reading. You have to read, you have to be disciplined to carve out time every day to read. And I’m still amazed that you know folks like Bill Gates or Warren Buffet, or even presidents like Bill Clinton and Barack Obama took the time to read every single day, despite all the demands of their time, given what they do.
And that’s a growth opportunity for me because I didn’t do it well today, but it’s something that I’m trying to be more disciplined about and try to set a bar of reading a book every couple of weeks, at the very least. So, after “Think Again”, I started reading, “In defense of liberal education” by Fareed Zakaria, So I was 17 years old and as we assigned to think about colleges, which is a fascinating read, I’m almost done with it. So look for a tweet, on that book to follow shortly.
Ankur: Which other book is on your to-do list.
Kamal: So the other book that I have is, by Nicole Perlroth, which is very close to the industry that we are in. And, if I had to call the title exactly “This Is How They Tell Me The World Ends” and, and she chronicles all the different security breaches. I’ve just started reading it. And she talks about, you know, what happened in, Eastern Europe and the Russian hack and the Iranian nuclear hack and she chronicles in detail, some of the major cybersecurity attacks and, and what are the implications for our world.
Ankur: If you get to have only one skill, one soft skill, there’s only one item on the menu. Which soft skill would you recommend for yourself and for others?
Kamal: I would say,being an effective communicator.
Kamal: And within that, if I had to prioritize, I would say being effective in written communications more than verbal or oral communication. So being able to write effectively, because I think writing is what makes you have clarity of thought. It teaches you how to learn, how to absorb and how to communicate that back to, to others on paper.So that would be, that would be my number one soft skill.
Ankur: And If you could shadow one CEO, who would that be?
Kamal: Oh gosh, there are so many CEOs I admire, but, If I were to pick one today, it would be something on that at Microsoft, just given the transformation that he has driven at Microsoft. And I just loved the way I just love his leadership style and the way he has been able to deliver impact.
Ankur: Awesome. That wraps up this episode of ZeroToExit Kamal!. It’s been a pleasure to have you on the podcast. We really appreciate you taking the time. Best wishes as you helped RedHat to reach new heights in cloud security.
Kamal: Thank you so very much. And thank you for having me.