How Great Leaders Innovate with Evan Davidson

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How Great Leaders Innovate with Evan Davidson

 

Sean: To continue off with your answers. So I love what you said about innovation. You mentioned the word innovation. And I wonder, with all the advancements of cybersecurity, again, we both agree that it is a hypercompetitive industry. Everyone must get into it. I want to get into it, to be honest. Right. How do you continue to innovate? Where do you get your ideas and how do you say, Oh, that’s a good idea and that’s not a good idea? How do you judge?

Evan: Yeah, so. So I can only go on the business side of what I see from the products because there are some super smart people that develop these products and solutions, and I take my hat off to them because, you know, we’re dealing with founders like Tomer Weingarten and the original founders of Sentinel One that had a vision ten years ago to build a product and solution that today is now starting to gain attraction. So you’ve got to have a. I think I think it’s the mindset. How do you be a founder? So I certainly think very strong technical capability, very strong vision of the things that are impacting customers and then to stay the course to deliver those. And we’ve got very smart people constantly looking at the innovation, especially on the threat side, because unless your solution can solve some aspect of dealing with the cyber problem and that’s fundamentally helping either prevent or detect or respond to some form of cyber threat, then it’s really not going to get traction. So we’ve got really strong technical individuals, visionary people that are on that side. What I look at is really what’s happening in the market today at the ground level. And I think when Sentinel one was created ten years ago, there was a solution in place today and that solution was called antivirus. Now, every individual who’s on this podcast is going to know about antivirus, right? They’re going to have McAfee or Symantec or something that they bought. Most of you will probably have something. You may not have even activated it. Maybe you do, I don’t know. But antivirus sits on every single computer in this world in some shape or form. Okay. And what we had realized is that, I mean, it’s pretty much useless, right? Like, it does a job. It does a job to a certain degree. And maybe if you’re a home user, it kind of takes away some degree of it provides you some protection. But today the threats have moved so fast and malware is morphing constantly and changing in the volume. Antivirus just can’t keep up. So within that context, this transition’s been happening over the last ten years where for 20 years antivirus really sat there. There was zero innovation in this space. And in fact, the innovation came from not changing antivirus but providing like another technology on top of it to help you detect and respond to the stuff that antivirus missed. So it was a bit like, let’s not just fix that, let’s put something else on top of that to kind of give you the protection. And so what I have seen is that the transformation is absolutely now taking place. It’s

taken a good ten years to get here, where I think customers acknowledge that my antivirus really is not not providing fit for purpose or kind of value for money. And they’re looking for more enhanced capabilities that can provide them better insight to what’s happening on an endpoint or some other part of their environment. And so that’s provided a great opportunity for Sentinel one. So I think you’ve got to look for areas of the market that have been incredibly stagnant and innovation now is right. And so that’s been happening. In addition to that, you’re now starting to get the consolidation in the market because, you know, if you’re a customer and you look at it and go, Oh my God, there’s 50 antivirus providers like how do you tell which one is better versus another? Right? It’s very confusing. And I think you’ve started to see a very big shakeout now within that space. So, again, a bunch of companies have been bought. You’ve seen a whole range of them been sold off to private equity. And I think what you’re seeing now is that transition taking place where customers and partners are understanding that better value is needed to help them protect and detect and respond. And I think that’s really what I’ve seen in this space. I think that’s where innovation is coming in now and helping our customers truly make that leap from what was a very static kind of technology, very binary technology, good or bad, to something that is now more sophisticated and where customers don’t have that capability. We really try to augment that through our partners. We try to build partnerships. We try to get partners to understand how to use this so they can deliver a service back to their prospective customers. And I think that’s really the opportunity.

Sean: Got it. And so now my question would be, I’m wondering, you saw that this specific area is ripe for innovation. There’s nothing new on the block and it’s not as effective as it used to be. Perfect. Ripe for disruption. How do you now say, okay, this is how much we’re going to sell it for and you’re going to make a profit if we use this pricing model?

Evan: Yeah, I mean, that is the million dollar question. And so let me just give you some insight again into the world that I live in. Okay. We have product individuals, we have product managers, we have directors of product that take all of the inputs, take all of the inputs that were required. If you think about it, we’re a cloud based service, so we put our infrastructure up in some of the larger public cloud infrastructure providers. We have a lot of costs to be able to deliver that. And then ultimately they will crunch the numbers with our finance team to then come up with some form of, you know, let’s call it price point or some form of price in the market that will then take that out and then see, I think you’ve really got to see what the reaction is, right, because when you’re an early stage. But in your building, is the product fit for the market? I guess that’s where you start to see whether what you’ve priced is potentially too low or is it too high. And then you can modify it. So normally by the time I come into organizations, which is normally kind of series C series D, which means they’ve taken three or four rounds of funding and they’re ready to expand internationally. They’ve normally figured out what that kind of price point is for competitiveness. That’s the most important point. And then I guess there’s always a question around if you’re going to go for market share. Normally there’s potentially some trade off in margins because you want to go out and you want to try and grab that larger opportunity. You know, maybe when you become a public company, there’s a high degree of focus on profitability. So maybe again, things change. So I think my statement in there is that it changes over time, the inputs will change over time and the product pricing will evolve over time. And we definitely need a very strong collaboration to the different functions of the business. And the most important loop is the field team. So the individuals like myself that are out working in the regions that interface with our customers is my team that are talking every single day to the partners in APJ, talking to the customers in APJ, and then we’ll provide that feedback loop into our business to say, Hey, look, you know, this is working. That’s not working. Customers think that’s too expensive. And, ultimately what you find is that balance, that equilibrium of what we can use to be able to be competitive in the market, but obviously build a sustainable, sustainable business over time. So it’s really many, many, many hands that will come up with that kind of pricing strategy to the market. And it will constantly change and evolve over time, depending on where you are in your phase of business and how it’s starting to grow and scale.

Sean: Got it. So we have some people who are startup entrepreneurs tuning in here and we’ve talked about storytelling and selling and negotiation in past episodes. But I’m wondering, Evan you mentioned earlier that your strength is in storytelling or a storyteller. Give us a sample of how you do your storytelling. I mean, I’m interested in what’s new in cybersecurity, let’s say. So I run an SEO company. We got over 50 enterprise level clients here in the Philippines working with us. And how would you for, for example, convince me to and this is the treat of this podcast right here. How would you convince me to partner with you, for example, to sell to my 50 plus clients here?

Evan: Yeah. Okay. Well, look, I would always start with You’ve got to help the customer, I think, understand the value of cybersecurity, like whether it’s my product or that product or that service. At the end of the day, if you don’t think cybersecurity is the thing, then you’re never going to buy my product. So I guess the question is I’ll always start with what pain are you in now? Now cyber can be seen as a little bit like insurance. Well, it’s like there’s no guarantee it will happen, but you always need something there just in case it does happen. I think it fundamentally changed back in 2017 and in my relatively short career in cybersecurity. For me, that was a pretty watershed moment. And in, I think it was May 2017, publicly globally, an attack called WannaCry happened and WannaCry was really the beginning for what I felt was the kind of the highly publicized, because ransomware has been around for a while, but the highly publicized. Ransomware attacks that took down thousands and thousands and thousands of machines that really became more from just a nuisance to. Let me put this back to you, Sean. Those 50 employees, what happens if you couldn’t use any of your laptops for the next week and in fact, all of them became defunct, got completely the hard drives were written off and everything that was on those machines was gone. Could your business operate? Could your business operate?

Sean: Honestly, if I didn’t have it all in Dropbox and Monday.com like these are softwares to use, right? That’s on the cloud. If I didn’t have it in those cloud enterprise level platforms, we’d be screwed 100%.

Evan: All right. Now the question is, well, how do you know everything is in Dropbox? What would happen if you couldn’t get a machine to get to Dropbox and it was going to take you two weeks now to get a machine.

Sean: We’re screwed, that’s it.

Evan: All right. So. So the big change I feel is cyber went from a kind of a risk discussion for sure. What’s the probability of maybe an attack happening and hurting us? And prior to May 2017, a lot of it was data loss. What happens if I lose some data? I couldn’t access some data. What happens if it’s now is actually, I shut your business down. What happens if every machine that’s associated with you now becomes defunct and you can’t operate it for a day, a week, two weeks, a month. Now, the only person who knows that value is you, Right? How, how, how important is that to you? And then that helps drive the conversation around investment. Okay. Well, we would be really in trouble. Okay. Like we would need to have. Okay. So now you need a bit of a cyber strategy. Okay, What do we need to invest in? And so I wouldn’t come in and say, buy my product, My first place would be to start. Start with where you are. What do you have? How important is it? Like, what’s the risk profile? Because this is more of a business continuity. This is a business continuity issue. This is not yes, cyber is a part of it, but there’s many, many things that could shut businesses down. Right. It’s like what happens if there’s a fire? What happens to these floods? What happens if there’s political unrest? What happens and what happens if we were shut down with some form of cyber attack and then how do we respond to that? And then ultimately that starts driving your investment. Right now, the lead in to my products and services. So, number one, most customers kind of can’t ignore and say, okay, well, we can’t operate without computers. All right. So therefore, cyber is pretty important to you, right? If you can’t operate without computers, you can go back to notepads and maybe do interviews with pen and paper, but that’s really not scalable. So therefore, you need to put some focus on it. Then the question is, where do you start? If you were to buy products and services, why? Sentinel One’s incredibly relevant today is that I’m going to take you back to the antivirus question. Every single computer today has antivirus. You will have an antivirus probably running on your computers. If it’s not effective, then my question is, if you think the risk is real and there’s more than enough public events out there to say today that cyber attacks are happening, frequency ferocity and globally and the impact is now becoming substantially higher, why don’t you gravitate to a part of your enterprise where you’ve got an existing technology and upgrade the capability? And that’s a really early entry point percent in the one. Get rid of that legacy antivirus and put in Sentinel one, which is kind of an AI driven, static behavioral capability that will help you prevent and detect and respond depending on where you are and your security maturity, your sophistication in responding to cyber attacks. And that’s really a natural entry point for many, many customers because there’s thousands of products. You can go and buy thousands of products you can go and buy. But to try and distill this down in a very simple way, it’s like, what do you have already? You probably have an antivirus. Why not invest some more money and really bolster that capability to ensure that it’s delivering you value? Okay. And just remember, your laptop is really a security kind of perimeter, right? Like you’re using, the user is connecting to the Internet from that device. And so you really need a very strong security control on that. So Sentinel one started as an endpoint technology. It’s really evolved. Now we can deliver it as a service through partners. We can manage services, so we can also do things like threat detection and response and remediation begins depending on the size of the company. But again, back to your story, start with making sure your investments that you’ve made already are working harder for you. Right? Let’s get back to the basics and do them really, really well. And that’s just a really good entry point for Sentinel one and our product and service. And hopefully that would then lead us in to say, okay, if you’re going to look at. Then we’re a great company to look at and I’ve got a million data points to say why we’re interesting, but that would be the story I would start with to try and encourage some discussion and some dialogue with you.

Sean: Awesome. That’s very good. Very good. I love it. I always say don’t go and try first, second, third base on the first conversation. Start with a couple of stories. You did that perfectly.

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