← The SaaS Podcast - Real Lessons on Growing Profitable SaaS
The SaaS Podcast - Real Lessons on Growing Profitable SaaS
Enterprise Sales: $6K in SEM to a $300M Revenue Machine
00:51:00
Vineet Jain (Egnyte) on building enterprise sales without freemium and competing against Box and Dropbox with hybrid cloud
Loading summary
Transcript61 lines
- [00:00]
A
Foreign. Welcome to another episode of the SaaS podcast. I'm your host Omar Khan and this is a show where I interview proven founders and industry experts who share their stories, strategies and insights to help you build, launch and grow your SaaS business. In this episode I took to Vineet Jain, the co founder and CEO of Ignite, a content, collaboration and security platform for mid market and enterprise businesses. Vineet arrived in the US with just $100 and no connections. He spent four and a half years at KPMG learning to sell to everyone from line managers to CEOs. That convinced him he could build something of his own. In 2001, right after the dot com bubble burst, everyone said don't start a company now. Vineet didn't listen. He co founded Valdero, a supply chain software company and raised $7.5 million. Revenue grew quickly for two years. Then Oracle and SAP moved in. Pricing pressure crushed them. They sold the company and investors made money, but the 70 employees didn't. That failure stuck with him. So in 2007, Vineet and three co founders rented a small office. No funding. Two of them did consulting while the other two wrote code. After a few months, the idea took shape, which was to basically move the physical file server to the cloud for enterprises. When they launched, analysts lumped them in with Box and Dropbox. Hundreds of companies were chasing the same market with freemium models and massive funding. Most founders would have followed that playbook, but Vineet did the opposite. No freemium, enterprise only and a hybrid approach which included cloud plus on Prem his board pushback. Analysts were skeptical and for years it was the same question. How are you different from Dropbox and box? Then in 2016, Gartner recognized Ignite as a leader in the category, a tiny company that had raised a fraction of its competitors suddenly standing alongside them. But Vineet didn't know if it would last. He he'd been through failure before. Today, ignite has over 23,000 customers, 1400 employees and generates several hundred million dollars in ARR. And they've raised 1 37.5 million without any additional funding since 2018. In this episode, you'll learn how Vineet turned $6,000 in search engine marketing into a pipeline that generated millions in revenue. Why he refused to offer freemium even when his board, competitors and analysts all said he was wrong. What happened when a Fortune 100 company said they wanted to visit their office As a tiny 12 person startup, we talk about why Vineet believes a great product in a great market still isn't enough and what most founders miss and why he believes consensus is the shortest path to mediocrity and how he built a culture where small teams of three make decisions. So I hope you enjoy it. If you're building or investing in a SaaS company, you already know security isn't optional. One breach and everything you've built can be at risk. That's where ThreatLocker comes in. Imagine having the power to decide exactly what's allowed to run in your environment and blocking everything else by default. No guessing, no hoping your existing solutions catch it. Real Enforceable control threatlocker is a zero trust platform that locks down your environment without disrupting operations, giving gives you total visibility and stops unauthorized applications before they become a problem. If you want stronger security and tighter control, visit threatlocker.com that's threatlocker.com I've interviewed over 450 B2B SaaS founders on this podcast. Success Leaves Clues and I've been taking notes every week. I send out the shortcuts, the blind spots and the tactics that actually work. So so you don't have to learn everything the hard way. Over 5,000 founders read it. You probably should too. Sign up free at Sasclub IO newsletter. That's Sasclub IO newsletter. You've built the product, you've got a few customers, but 10k in MRR still feels miles away and you're not sure what to do next. That's the hardest part of the early stage. Not building, figuring out what actually moves the needle. SaaS club launch gives you a clear plan, weekly coaching and direct access to me. So you're not guessing anymore. Apply at SasClub iolaunch. That's SasClub IO launch. Vineet, welcome to the show.
- [04:40]
B
Thank you Omer. Glad to be here.
- [04:43]
A
My pleasure. Do you have a favorite quote? Something that inspires or motivates you?
- [04:47]
B
You know, it's funny, I write these one liners or quotes I hear from people I read and one of my favorite ones, which I try to tell to many people whether they want to listen to me or not, is it simply stated, it says I've had many crises in my life and most of them never happen.
- [05:06]
A
Yeah, I was talking to somebody about that the other day and they were talking about these worst case scenarios that could play out and I was like if you're just imagining this stuff, why don't you imagine good stuff because you'll probably feel better about that. But I'm just as guilty as well. It's like it's so easy to sort of fall into that trap. So tell us about Ignite. What does the product do, who's it for and what's the main problem you're helping to solve?
- [05:33]
B
Sure. So Ignite is a company that I started with three others. We are 18 years into our operation, still private but growing stronger by the day. Around 23,000 customers. By most standards we are a sizable company, around 13, 1400 people. But being in the valley you're fairly small given that you're surrounded by Google and Facebook and VMware. And in terms of what we do is what I started with versus how it's evolved was fundamentally it's a core infrastructure play for businesses. We don't cater to the consumers or prosumers From a go to market perspective, of course it'll work for them. And the idea was to take the underpinnings of a physical file server and build that or move that into a multi tenanted hosted architecture which people call the cloud. And that over time became a content collaboration platform which is the foundation of the company. And on top of that we added the second layer, imagining a two layer sandwich, the bottom one being content collaboration. The second one is content security governance. So how do you manage, protect and then of course address a lot of compliances whether they are industry specific or geography specific, all in this one platform. So we go after our classical target base is what we call as the mid market, which from a seat perspective, which is how we have always sold in the past, although that model is changing is 100 seats to around 7,500 seat is our sweet spot. We have some very, very large accounts. You would put them in the Fortune 2000. Whether it's a Red Bull deployment worldwide or Ikea or names that people recognize, they inbound to us the product scales. But we don't chase the big blue whales or the elephant. Pick your animal of choice purely from the economics of the business because the TAM in the mid market is very
- [07:23]
A
large and give us a sense of the size of the business. Where are you in terms of revenue?
- [07:28]
B
We are well north of, I would say given that I'm private, I can share the exact numbers. But we are in several hundred million dollars just to give you some ranges. It took me 12 years to get to 100 million. It took me three years to get to 200 million. It took me year and a half to get to 300 million. And the path to the next milestone, which is 400 million is in sight.
- [07:57]
A
That's awesome. And I think you've raised 137 million to date, or as you earlier corrected me, 137.5 million today.
- [08:07]
B
The reason AB was so precise is, you know, being in the Valley, it's almost like a rite of passage that companies in our space would raise around every 18 months. I never did that. And in fact, the last time we raised financing was in 2018 when Goldman gave us a check of $75 million, which to me is still a very large part of money. And that was the last time and we never raised money. Since then we have been EBITDA positive, improving EBITDA margins. In fact, one metric that the value fixates on is the rule of 40. We are past the rule of 40.
- [08:40]
A
So I want to talk about how you started this business, where the idea came from. But before we get into that, I want to talk about how your background, where things started for you, at least in terms of this startup journey, and why I think it's so significant and relevant is that a lot of the times I hear founders saying, I don't have Silicon Valley connections, I don't know anybody. How do I get traction, how do I raise money, how do I do all these things? And your story always stood out to me is that you arrived in the US with $100 to your name. Is that true?
- [09:23]
B
I had $100 in my pocket and I had 2,300 in my Barclays account in UK, which is where I'd come from. But I had a job in hand, so I landed and I started working. And of course the first paycheck was super critical for me to take care of my expenses, but indeed that is true.
- [09:40]
A
So how did you, I mean, you arrive, you didn't have a network, you know, didn't know anybody. How did you, how did you go about meeting people and starting to connect with folks?
- [09:56]
B
So first of all, when I landed here, I had a job at Bechtel, which I did for a year. Then I got hired at kpmg, where I was there for four and a half years. And of course KPMG to me was a great, great grounding experience where you're dealing with customers in different parts of the world within the us customers in down south versus middle America versus the Valley, very different styles. And you have to learn to calibrate on how you can relate to them, whether it's a line level manager or a cio, or sometimes you present to the CEO. So that for me was giving me a fairly unique ability to think on my feet and being able to hold a conversation at different levels. And then I always had this. In honesty, the itch to scratch was I'm an immigrant in the Valley. I still think like an immigrant, although an American citizen, was to say, can I build a company, a software company, in the heart of the beast? And with that sort of, I would call it slightly foolish optimism where you don't know all the answers but you have a strong conviction. I jumped into the deep end where it was like, okay, we're going to build a startup and I didn't know anybody, as you said. I didn't know how the VC circuit worked, I didn't know anyone on Sandhill Road. But through some 2, 3 degrees of separation, I managed to get my first meeting with Vinod Khosla when he was still at Kleiner Perkins. And I went and pitched to him an idea with two of my fellow current co founders. And the idea must have resonated to the point they gave us over time, seven and a half million dollars of Series A. And that was my starting point. And then we raised 23 and a half from Kleiner, Roger McNamee at Integral, more Davidow Ventures, Trinity and all of that. That was my first company prior to Ignite, called Valdero, which was in supply chain software. But that's where I truly cut my teeth. Now as a co founder or a founder, I must say my self awareness was very high that I knew that I didn't have the chops to be a CEO. I called my ex boss from KPMG and I said, why don't you come and join and run the company. He was surprised he became the CEO. I was the head of engineering and we built that company and ran it over around three and a half to four years.
- [12:23]
A
You raised money for Valdero and then you exited. But you described that exit as not great and you felt like a bit of a failure. Can you explain that? What happened? What went wrong?
- [12:39]
B
Absolutely, yeah. Two things actually. One is the lesson I learned is, and not to get too cute to say when others zig, you zag. But we were raising money right around after the dot com bubble had burst. And everyone in their sage advice was this is a bad time, nobody's going to give you funding. And sometimes, as I say, ignorance is bliss. We were like headstrong. We went in and you can raise money if you have a viable idea, no matter what the secular trends are. You will be able to raise money if that's what you're going after. And we proved that. Our first round came in early 2001 and then we Built up from there. But to go to the crux of your question, we were pitching and building our supply chain management solution for very large enterprises. So our first year after the product got released, we had a meteoric rise. We had customers like Motorola, Juniper Networks, Leapfrog, Polycom this and that. And the next two years were heady. The revenue ramp was like beautiful. Around end of year three, we started seeing a slowdown because big behemoths, particularly Oracle and SAP, had moved into this turf with advanced planning solutions. And we were dealing with not only these well funded and large public players, but also the pricing pressure was intense. And at the end, Ray Lane, who sat on my board, he came through Kleiner, he made a call, he said, look, we should sell the company. And quite frankly, we sold it and we made some money for investors. But to be very honest, to me, it's a failure. We did not generate wealth. For there were 70 employees at that time. I was the head of engineering, not the CEO, but I sat on the board. So to me it was a personal failure that I failed my investors, I failed my employees. And that fire still burns in my heart to say never again.
- [14:38]
A
Was that one of the big drivers for you as you set out to build Ignite?
- [14:43]
B
Yes. After we sold the company Valdero, I had made up my mind that I'm going to try another one. And fortunately the two other co founders from my previous company had the same mindset. And then we had the fourth one join who we had hired at Palero from kpmg, Chris and full transparency. We took an office, a small office, keeping the rent in check. We had a semblance of an idea, but sometimes form over function. So I incorporated a company, I set up payroll and we would show up at the office on the whiteboard, think of ideas and quite frankly, we were still trying to figure out, okay, what exactly are the problems that excite us. And after a span of like 2 1/2 to 3 months, this idea, which is the germination of Ignite, started taking sort of strength in our thinking to say this is the problem we ran into, which is a physical file server. It is inside the firewall. You have to do VPN for accessing information. A lot of data is locked away where inter enterprise or intra enterprise collaboration is difficult. And we basically started building and we did some consulting to fund it. We didn't raise money for a while. It was me and another founder of mine, Rajesh, we were doing consulting. The other two, I were building the code and that's how we took this company off the ground.
- [16:19]
A
So when you launched the first version of Ignite, as you and I were talking earlier, certainly from an analyst perspective, it was seen as in the same category as a Dropbox or a Box. And when you launched, those guys were really making freemium a very famous thing, and they were kind of growing aggressively that way. But you took a contrarian approach. You decided that, number one, we're going to focus on enterprise from day one, and two, we're going to charge for the product. What drove those decisions and what. What kind of, you know, what were VCs telling you? You're crazy. Why are you not doing this and figuring out how to grow faster and so on.
- [17:08]
B
So indeed, when we launched the company and then we raised Series A, Series B, all the way to Series C, it's interesting that we were growing very well. That's why we were raising financing from Polaris and Mike Maples and Floodgates. Series A, Series B was Kleiner Perkins. Series C was Google ventures. So tier 1 VCs. But the inevitable question would be posed to us to say, how are you different than these two companies? In fact, to make it more colorful, when we would try to talk to the Gartners or the Foresters, it's like, hey, you're amongst a few hundred companies doing what you're doing, so what makes you stand out? And we would literally stand up from the rafters and say, oh, no, no, we are enterprise only. We don't cater to consumer presumer. I also had this point of view, which is still relevant. In fact, my Twitter handle is very evocative of that, that while the control plane could move to the cloud, not all data could move to the cloud, or you would still need some data cached locally, either for speed issues or there's certain applications that don't work very well with the cloud. So the word hybrid was very core to how we offered. In fact, my Twitter handle is Cloud not enough, which still resonates. Oddly enough, it was a challenging time. We would get questioned by analysts and the press while the business is growing, as indicated by successful fundraising rounds with increasing valuation. But truly speaking, Omer, you can be as brilliant and as hardworking as you think you can be. But you also need what I call as the third dimension. You can call it luck or divine help or whatever it might be. Market trends to break your way. In 2015, this whole category, which initially was coined as Gartner speak efss Enterprise files against share it amplified to content collaboration. Again, Gartner speak. They keep inventing these and we came in our triumph because of our enterprise jobs. We were not doing any freemium. We had an element of freemium 15 day trial but we would not offer unlimited or free of anything to anybody because it was good for consumers, prosumers, not for enterprises. And I indeed had to deal with my board to say why aren't you doing it? Why are you trying to swim upstream? But I stuck to my conviction. And 2015 a very interesting thing happened. The category amplified to content collaboration and on top of it, when the Gartner MQ came out the magic quadrant, we were in the top right in 16 and 17. This small company in terms of the money raised, we were in the leader pack. And suddenly it changed everything about Ignite. Of course customers, it helps with customer validation, especially as you go up market. But even in my own board the chatter around why aren't you doing what those other guys are doing? And then since then when we raised a series D and E, the question about how you different than these two became less and less relevant. And today we don't see either of these two as competition. Maybe box to some extent in certain use cases, but we have outdistanced ourselves from most of the players. In fact most of them are not around. But it was also sticking to our conviction and being able to execute on it. It's good to have a belief, but can you prove it? And the best indicator is revenue growth, your dollar based retention rate, your gross margin improvement. And we are beating all of these companies for the last four years in all those metrics.
- [20:41]
A
So back then everyone was rushing to get onto the cloud. And you mentioned this hybrid approach where you were doing cloud and on prem. Did you get a lot of criticism from investors or analysts about taking that approach? Why aren't you going all in on the cloud? And did that hybrid approach make it easier to sell to enterprise customers or was it kind of more confusing for them?
- [21:12]
B
Actually first of all, even though for an outside in perspective when everyone is going gaga about the cloud, we didn't get any pushback from our investors or even the analysts. They really appreciated the point of view because it was based on not just having this approach being contrarian for being a contrarian sake, it was demonstrated by the fact that while there was more and more data going to the cloud, whether our cloud or somebody else's cloud, the role of on prem was becoming more specialized and the use cases were very relevant depending on the industry and the application type. So I'll give You a good example, let's say if you're in construction engineering and you're building Dallas Fort Worth, $2 billion airport extension project, one of the, in fact the general contractor there, the design files that you have, if you were to print them, would be 65,000 pages. Now on the site, somebody has to make a change to the file. Trying to do that in the cloud would be quite a challenge because they are on the 15th floor of that building with an iPad. Try doing that. The laws of physics get in the way in terms of latency. But instead if on the ground floor, on the job site, in the shed, there was a small NAS device running our software. And these are commercial NAS devices, we don't provide hardware, but we burn our software on this. Imagine you could pull up the file using a typical network drive letter like X, Y, Z, whatever you like. You pull the file on a land speed, you make the change, the change is done, and the block level delta gets synced to the cloud across all sites. You can pull it off your mobile application or whatever application interface you use. That was one of the use cases which we had patented. To say the role of hybrid is almost similar to. Remember the word paperless office I was looking up in Wikipedia? BusinessWeek claims to have invented that term in 1975. Paperless office, it still is a mythical concept. There is paper, but less paper. It's more specialized. And that was the bet I placed that the role of data would become more and more specialized in terms of you might need on prem. So you can have cloud only solution. And most of our customers are cloud only. But a good 30% love the hybrid because it gives them the flexibility and the security of having data available locally.
- [23:43]
A
That's interesting because when you talked about hybrid, I sort of assumed it was either you can go cloud or you can go on prem. But there's an interesting space in between which you just described with that use case where you can update on prem but then still sync to the cloud.
- [24:04]
B
Yeah. So to be very clear, the control plane is always the cloud. The data plane can be completely cloud or cloud and on premises. And the cloud should always be treated like that elastic infinite disk in the sky.
- [24:19]
A
Yeah, got it. Building a SaaS company from the ground up is tough. Protecting your data and securing your environment shouldn't be. With ThreatLocker, you can deploy application control in days to weeks, not months to years, and enable your IT team to decide exactly what's allowed to run and deny everything else. By default, lock down your environment without disrupting operations and operate with confidence. No guesswork, no reactive solutions, just true proactive control. ThreatLocker is a zero trust platform that mitigates the risk of downtime, reputational damage and cyber attacks, including ransomware and zero day exploits. If you want stronger security and tighter control, visit threatlocker.com that's threatlocker.com so we talked about, you know, you targeted enterprises from day one, but when you set out, you didn't have any customers, you didn't have a track record, logos you could talk about, and you're selling a product which requires a high level of trust for the enterprise to have whatever these sensitive documents are. How did you land that first enterprise customer? Can you just tell me about how, how easy or hard that was?
- [25:36]
B
So initially, as you're rightfully pointing out, there was no brand name. The category itself was quite nascent and there were just four of us as the people who started the company. I still remember we were looking at, okay, how do you build a demand funnel? And one of the things that I would advocate to anyone who cares to listen to me is we put a lot of focus on product market fit, which is supremely relevant. Like you can't build a product if there's no market need, otherwise it's just a R and D exercise. But the one third component which is super critical is if the two dimensions of the product market fit. The third intersecting dimension is distribution. How do you scale? How do you build the funnel? How do you build the pipeline? Do you have multiple pipelines? Can you build a systematic machine like approach? So initially we were targeting fairly small customers, the SMB. And we started playing with, quite frankly, experimenting with search engine marketing, SEM, of course we had a website and we would try to leverage search engine optimization. But we were so new that your SEO is practically nothing. And I still remember the very first month we spent $6,000 on SEM and I was like, holy shit, that's a lot of money. Now today we spend, I won't be too precise, but we spend a few million dollars on digital marketing on a quarterly basis and the throughput is still there. So the initial pipeline building approach was using digital marketing. And then as we matured, as the customer base grew, as the market matured, then we started building inside sales offices with people with sales reps, but inside sales, nobody's out in the field. So my first inside sales office was in Spokane. Then of course, initially it was Mountain View, then Spokane, then it was Raleigh, then we added Salt Lake City. And then of course we have Offices overseas now, including Reading and the Middle east, now in Dubai. And then as we got further up the food chain in terms of the class of customers, we now have field salespeople strewn across different parts of, let's say in the US you might have two people in Chicago, one in Minneapolis. But our predominant go to market motion. No matter how the top of the funnel is built, whether it's through field marketing, digital marketing or account based marketing, different elements, we still have 60% of the funnel. Management is done with an inside sales approach to keep the cost of sales low and keep looking at the unit economics of profitability of the business. And the term that people use is the cac. What is your cost of customer acquisition? If you have a very good LTV to CAC ratio, it's a viable business. And that's what we have been focusing on.
- [28:42]
A
So this first five or ten customers, did they all come through the search engine marketing you were doing or was it a combination of that and outbound?
- [28:51]
B
No, initially it was all of them. And in fact, I'll give you an amusing anecdote. In the first 25 customers, I don't know how we managed to get a Fortune 86 company. And I can't name them, they're, well, I mean the Fortune 86 in the US it's a well known name. And then we got a note from their IT director to say, hey, they were based in New York. We'll be visiting the. This person, he'll be visiting Silicon Valley. We would like to pay you a visit and also can you arrange for a visit to the data center? And we were supremely nervous because we were like such a teenage little company catering to a Fortune 86. And we said, if they come here and they see it's just a bunch of people, will they cancel the contract? I mean that was a big fear.
- [29:38]
A
Was it still four of you at the time?
- [29:41]
B
No, we'd grown to around 12 people. Okay, but still 12 people for a Fortune 86. They'll be like, hey, what the heck? But we managed it. We had focused on content security and governance and compliances. Besides, you know, your typical ISO certification and SOC this and SOC that compliance. We had given our enterprise jobs. All four of us come from the enterprise background. So we handled it well and it was good to see that they went back and they started buying more of Ignite. So we must have done it.
- [30:13]
A
Well, that's always a fear, isn't it? When you're a small startup and you're selling to a big customer. And you're not trying to necessarily deceive them, but you're also not highlighting the fact that you're this tiny operation. So let's talk about a little bit about you as a leader and the culture that you try to create in the organization. We always hear the common wisdom is customers always come first. You reject that. You talk about employees coming first. Tell me about what that means to you and in reality, how does that play out in terms of the day to day running of the business?
- [31:05]
B
So what I mean by that is first of all, I do say that employees come first because, you know, if your employees are not happy, satisfied, how can you have happy customers? How can you, Even if you get the initial deal with the customer, One of the big metrics that in Our industry, in SaaS in particular, is dollar based retention rate. Like if you sold me, if it's 118, that means I sold you $100 in the first year, another 18 in the second year and the higher it is, that means you're sticky, you resonate, you grow. That cannot be possible purely on the back of just a great technology. You have to have customers who trust you. You build a relationship with a rapper with. And for that to happen, people at Ignite who are working with them in post sales as CS people, customer success or support, they have to be happy in where they are now. When I say happy, I'm not going this far to say at Ignite, I will never offer you free haircut or a free car wash. I lost one person. I still remember. This is lots of years back. I think the values also change quite a bit because, you know, we are next door to Google and Facebook and this and that. I remember the senior director in ops, he came to me and he said, I'm leaving. And we were like, he was very good. And I did an exit interview. I said, why are you leaving? He said, you know, there's bigger growth opportunities. You can't argue with that. He said, I'm also going to get free. Was it dry cleaning a week? And when he said that, I won't say it on this podcast, I used a couple of cuss words. I said, power to you, man. You should go to that company. So we do take care of employees in terms of we give them free food. It's more in terms of for lunch and all because, you know, it makes it more efficient. People can work and not take one hour break and all. But I also believe that if you treat most people, if you treat them as grownups, most People will not abuse the system. A lot of these big company policies are designed for the bottom two, 5% abusers. Why tax on that? Why not put the faith in the people? More often than not you'll be rewarded. And my belief always has been that treat people, your employees with respect. People leave for two reasons. One comp. But comp is secondary. It's always about growth. Am I having a personal growth curve here? Whatever that growth means for them, as long as you can strive to provide that path. And it gets difficult omer as you get bigger and bigger. Like there was a time I would know every employee by name. Now we are almost 1400 people. I don't know every everyone by name. But honesty and sincerity is number one and one thing which I will say and I'm not trying to be preachy or pontificate here, I'm as capitalist as anyone. At heart people should be treated with respect. But you as a leader should be thinking for the goodness of the whole and not just yourself or for a select few. The more you democratize whatever success is in terms of bonuses, in terms of whatever the things are, the better off you will be. You will scale better. And the other thing which you know, people talk about, you know, you talk about customers. One of the things I say to salespeople and our sales team has grown. We have around 400 people in sales now, both account carrying, quota carrying reps and pre sales and post sales or slightly over and cs. It's like if you talk about a customer as a prospect or an install based customer where you're trying to upsell. If you do communication within the four walls of the company, whether an email, slack or across the cubicle and if the customer could read it or hear it and you were not embarrassed about it, then it's right. But don't treat a customer like a bank that you have to constantly rob.
- [35:08]
A
You've also said that decisions shouldn't be made by consensus. How does that actually work? How do you encourage that? And then also how do you basically get buy in if you're trying to not be in this sort of everything is sort of consensus driven type of culture.
- [35:32]
B
That's one of my pet topics. Consensus is the shortest part to mediocrity. The thing which I'm also learning and I make mistakes less as we grow, but still make mistakes. The power of delegation. You have to learn to trust people at different levels for different parts of the business. You cannot when you were 20 people versus 200 versus 1400 in our case, you have to have these small, small sectors of excellence in the respective groups in different department functions where you trust people, even if you think as the manager that I could do a better job than them, then either you've hired wrong people or you don't know how to scale. So learning to delegate, learning to trust, knowing very well that whether it's you or whether it's them, out of hundred things to do or 10 things to do, eight will work, two will fail and that dispensation is available to you and as well as to them. If you don't do finger pointing, you'll collectively move forward faster than if you were to have a top down hierarchical approach, which a lot of companies do. And I do not like to be in any meeting where there are eight people discussing a topic and then you're looking at what is the lowest common denominator to move forward with. Because as I said, that is the consensus driven approach. Most of the critical decisions in the company for respective roles at the respective levels are done between three people, in my opinion.
- [37:01]
A
How do you define that? Like who? What do you mean by that?
- [37:04]
B
But three people depends. Like for instance, let's look at M and A. It's very relevant. For my company, we have not done any significant acquisition. We've done technology duck ins like a million there, million, two there, two million there. Now we have the wherewithal both from a financial perspective and the ability to absorb it. From a go to market perspective of a company that could be 50 to 100 million. ARR, we could buy that. We are on the hunt for it. Now while that function reports to Stan, who's my chief operating officer, who then ultimately reports to me, he's got a team of three people, Core Corp development or sorry, business development people who are in charge. And there's one guy there who's running the show. So his, he and his team's job is to drive that function to the point every two weeks they present their findings, I'll offer my opinion, other people will offer their opinion, product people will come in. But the responsibility for driving that acquisition is with that particular team. So am I the person who's calling them to say no, no, no, this is what you should look at once in a while? Of course I will. But that's the purity of their job. They don't focus on anything else. And for anyone in my E staff to say M and A should be part of my remit doesn't work. Those are the three dedicated people with a very senior VP level person driving M And A and you can then apply that to across different groups. Like if they're looking into FP and A on how to manage sales finance. I'm not going to go tell them what needs to be done. They're smarter than I am.
- [38:43]
A
You've also said that one of your biggest mistakes was holding on to people for too long. So this is relevant, I mean, for you, I'm sure today, but also for an early stage founder who is making his initial hires. So what are some of the early warning signs that you look for that might tell you that this person is not going to work out?
- [39:12]
B
I wish it was such a science, but I can tell you the one thing I've learned over the years, and I hear it from others also is in fact, I was in a very interesting event which was run by Kleiner Perkins lots of years back at pebble beach, and they had one of these Peter Drucker types person there. I won't name who it was. There were 200 CEOs in the room. I was one of them. And this guy asked the question, how many of you think from a senior leadership hiring perspective that you should have hired the person sooner than when you actually hired them? Some hands went up. Then he said, how many of you think you should have fired that person, whatever that person was, sooner than you actually fired them? All hands went up. And that is symptomatic of this problem that obviously we all believe we are hiring people. You do seven interviews, back channels, formal references. Nobody thinks they're hiring a loser. And yet some people don't work out. And then you fall in love with the idea that you hired them. It's a turnaround. It's like buying a stock. Even if you can see the stock is going down, you hold onto it. Some people do, some don't. And it's a challenge to look at the warning signals and act faster than what you have done before. I think I've gotten better at that. Now you can't pull the trigger too quickly on people because then it's so mercenary. Anyone who comes in needs, depending on the nature of their job or the role, a good couple of quarters to get their feet wet. Or rather their toes wet. Not even their feet wet. It takes a good leader, depending again on the role, around nine months to a year to truly get their sea legs. And you can see the signs, are they ramping up? And again, as I said, Omer, it's not a science. It depends on the role and you know, at what level are they operating. But Now I've become more dispassionate about cutting my losses. And in that process, mistakes will be made. I. I can't tell you. Oh yeah, yeah, it's a completely foolproof process. We winnow out the wheat from the shaft. No, you still make mistakes.
- [41:15]
A
Let's talk a little bit about AI. You launched Ignite Copilot, I think it was, last year. So like many SaaS companies, you're integrating and building AI into the product. As you sort of look over the future, the next few years, what do you think are the biggest opportunities as well as the biggest threats in your space?
- [41:43]
B
Obviously we couldn't have finished this conversation without talking about AI. So the one comment I'll make is the hype cycle and AI is the highest it's ever been. And interestingly, every software vendor, what they're sold, if they don't have any AI capability, they are toast. And in the last few days you're seeing the software stocks, especially you know, the application tier guys getting a hammering because AI will come and eat their job. Last two days, this legal tool from Anthropic is supposedly going to eat the lunch of the likes of LegalZoom and bunch of others. And while that is partly true, you will always need system of records. You'll still need the raw primitives for AI to work effectively. But coming back to our case now, AI as when people talk about it, is a reference to generative AI. Machine learning. And AI has been done for a long time. We have had it baked into our product, especially in the secure and governed layer for things like anomalous user behavior detection, identifying sensitive data, data classification, extraction, blah blah, blah. But generative AI is what people refer to as AI. So needless to say, last year Q3, we are on a fiscal calendar. We basically rebirthed or rather launched three plans, plan types which we call as NGP next generation plants. Each of them have a plethora of these AI capabilities. And surprising to me in a positive way for what we had budgeted in terms of what we'll end up selling in Q3 and Q4, we were running twice as hot, meaning we are able to sell more than what we had planned. And fortunately that trend continues unabated. But having said that, I'm going to say now two very countercultural things. One is everything and anything that people are building today, including ignite. Leave aside the foundational model providers who themselves are in an arms race. It's a fungible area. Everything we are all building will increasingly become a commodity. You will be Expected to have that baked into your product. So be smart about it, don't leave money on the table, but don't get too greedy and price yourself so high that when it comes to one year renewal, you'll get thrown out. That's one second. While the noise level is very high, most of the initial AI capabilities, especially in the enterprise, I'm not talking about ChatGPT for a consumer or you know, people using lately, you know, all the noise around cloudbot and all that stuff. My point of view is that you will have an evolution of your capabilities from what AI has done is basically enhanced natural language search. Enhanced search, you can run a query across copious amounts of data, unstructured, structured, and AI can give you good answers. Then next thing everyone's talking about is agents. I mean, not a single day goes by without somebody talking about agentic this and agent that, which is true. Now, most of these agents will be taking parts of typical workflow, whether it's industry specific or department specific, and you can automate parts of it. But my point of view is the technology is not at a point where you can avoid the human in the loop, especially in the enterprise. You cannot have critical decisions being automated completely with AI, whether you call it super intelligence on what have you. So the evolutionary path of AI, from my perspective, is it'll get increasingly sophisticated, but this fear about it'll replace humans again. I'm talking about businesses is overblown. And instead of seeing this problem as AI causing reduction in workforce, I think it's an amplification of the existing workforce. You make people smarter. In fact, my cto, my fellow co founder, he wrote a very nice blog which was featured in VentureBeat a couple of weeks back. He said, we are still hiring a lot of junior engineers. Now people would say, oh, with wipe coding, with cursor, with augment, and with this and that, with Claude Claude code. Why do you need junior engineers? You still need people to write stuff, production, quality. You can do wipe coding and quick prototyping and a quick app. But that's not good for the enterprise from a security perspective. From a scale perspective, you still need a human in the loop. So it's the current state we are in, things will evolve. And just like any new technology, this one of course has long legs. This won't come and go or disappear in terms of the noise. It's able to attract like IoT or Web 3.0, which none of them disappeared, but they're not something we talk about on a regular basis other than crypto this one has a long multi decade impact in our lives. So it's real, but where it's today it's not. Replacing human beings is my point of view.
- [46:51]
A
I like that. Great. Well, thank you for sharing that. Let's wrap up and get onto the lightning round. I've got seven quick fire questions for you. You ready?
- [47:02]
B
Sure. Go for it.
- [47:03]
A
What's one of the best pieces of business advice you've received?
- [47:07]
B
Trust your instincts, but learn to delegate.
- [47:09]
A
What book would you recommend to our audience and why?
- [47:12]
B
One of my favorite books is Bill Walsh's the Score Will Take Care of Itself.
- [47:17]
A
Great book. What's one attribute or characteristic in your mind of a successful founder?
- [47:22]
B
Highest level of integrity. You've got to be very truthful with all the concerned parties, employees, customers, partners, press, don't bull people.
- [47:30]
A
What's your favorite personal productivity tool or habit?
- [47:35]
B
I run in the morning, early mornings when it's dark every other day without any headphones or anything and I run out in the open. It clears up my mind and gives me time to think and sometimes problem solving.
- [47:49]
A
What's a new or crazy business idea you'd love to pursue if you had the time?
- [47:54]
B
I have always been fascinated with nuclear physics and lately with small modular reactors, all the energy deficiency with all these data centers, nuclear is back in business. If I had no other things to do, that'll be one area I'd try to poke my head into and say what can I do here? It's always been fascinating to me. I was fascinated in physics. I'm an engineer. Mechanical though.
- [48:17]
A
What's an interesting or fun fact about you that most people don't know?
- [48:22]
B
We all think so highly of ourselves. I actually do a lot of gardening. I'm blessed to have a lot of fruit trees in my backyard. And while I get the gardener for taking care of the lawns and all, all the fruit trees, their fertilization, if they have any infestation and they're big ash trees, I take care of them myself. In fact, I have a project for this weekend.
- [48:44]
A
Cool. And finally, what's one of your most important passions outside of your work and gardening?
- [48:49]
B
You know, I'm in California and in the valley and if you're an outdoors person, Omar, there's no better place in my opinion, like within a 50 mile radius for one year. I could take you hiking to a new place without repeating it. So outdoors, hiking, running and sometimes depending on the time, some mountain biking. Not too much lately. That's one area that it always puts me in a good Mood.
- [49:17]
A
That's a great way to spend your time in the outdoors. So Vineet, thank you so much for joining me. It's been an absolute pleasure. If folks want to check out Ignyte, they can go to ignite.com that's e g N-Y-T e.com and if folks want to get in touch with you, what's the best way for them to do that?
- [49:34]
B
They can send me an email directly. It's my first initial V last name J A I nite.com I'll always respond as long as you're not pitching me a lot of stuff to buy.
- [49:48]
A
Yeah, of course. It's been an absolute pleasure. Thank you so much and I wish you and the team the best of success.
- [49:55]
B
Thank you Umar. A pleasure to speak with you. Take care.
- [49:58]
A
From my cheers. SaaS companies move fast. Most teams are focused on building and optimizing, not thinking about vulnerabilities, ransomware or zero day attacks. But they can strike without warning and put your entire business at risk. With the ThreatLocker Zero Trust platform, you can get ahead of these attacks and and stop them before they start. Instead of allowing everything and trying to spot the bad threat locker blocks everything unless you approve it, giving your IT team full visibility across your environment. The result is stronger security control and your business keeps moving without interruption. Visit threatlocker.com that's threatlocker.com you're putting in the hours, but your SaaS isn't growing. It's not your product, it's not your pricing. It's the way you're wired as a founder. And once you see it, everything changes. Every founder has a blind spot. The builder ships great code but forgets to sell. The visionary chases big ideas but can't execute. The optimizer tweaks endlessly instead of finding customers. Which one are you? I created a free quiz that identifies your founder archetype and gives you a specific playbook to fix what's holding you back. Take the quiz at sasclub IO Quiz that's sasclub IO Quiz. The playbook that got you to six figures in ARR won't get you to seven figures. And at this stage you don't need another course. You don't need more content, you need clarity. And you need people who get it. Because right now you're probably second guessing every decision, wondering if you're focused on the wrong things, working harder but watching revenue flatline. SaaS club mastermind is how you get there. A small group of founders all scaling to seven figures with mastermind calls and direct access to me. Think of it as your board of directors without the drama. Apply at sasclub IO Mastermind. That's sasclub IO Mastermind.