Welcome to silicon slopes Podcast. Today I'm joined by Hans Robertson, who is the executive chairman and co founder of Verkada. How are you? I'm doing great. Thanks for having me. Thank you for coming in. So you, you don't reside here, you're out in California, but you're here for some skiing. And today, it happened to snow a lot. So the timing was really, really good. Nice to be lucky.
But it'd be looking good sometimes. Alright, let's just jump in with
tell us a little bit about Verkada. And the founding story, where the idea came from? Yeah, of course. So myself and the other co founders had actually been looking at physical security as a as a, an area that really could benefit from more innovation for a number of years before we started the business. And I myself had started a company previously Meraki, which was sold to Cisco. And then coming out of there, I knew I wanted to do another company, and we weren't going through a list probably like a lot of people do have, oh, maybe this would be a good idea, this would this would be a good idea and circled back on physical security a number of times.
And what ultimately drew us to it was the belief that we could really build much better products than we're, you know, more or less common in the in the industry, and primarily through great software. So that's kind of how we ended up getting things going. Alright, so this would include cameras, alarms, and control panels and the monitor Yeah, kind of everything that you find in
a typical school or hospital or commercial building or warehouse there. It just turns out, there's a lot of these systems out there. And they're, they're pretty overlooked little obscure, you know, maybe it's not the most exciting cocktail conversation, but it's, it's a it's a category that, you know, everyone needs. And it's important, you know, it actually protects, you know, the assets and the people and it's important category. That's what got us excited about it, because there's just it's a big, it's a big space. Yeah. Yeah. Especially when you've been victimized and you don't have it. Yeah, for sure. A lot of remorse there.
So this is interesting. You had a really good success with Meraki and 1.2 billion, right? Yep.
So then, according to you, just what you just said, you and your co founders, were looking for a new idea. So not, not a lot of experience in physical security space. So you opted to pursue this market based on your combined opinions that this would be a good one. So kind of nascent and starting new, how did you guys go about dividing up? Who's doing what? Yeah, hiring? Yeah, for sure.
Yeah, for sure, we did not know much about the space. And
we tried to educate ourselves very quickly. And one of the first things was we just more or less, when looked at all the products in the market, we went to the major trade shows, and we really tried to get a sense of make sure we understood exactly what was out there already. And one of the nice things about a product, like physical security is it's pretty easy to tell, you know, it's not like say you have some new cloud database that you want to create, and it's pretty hard to understand what a internet skill database would need to do. I mean, it's, it's, it's harder, and one of these products, you can just, you know, buy it on Amazon and plug it in and see what it does. And so that does make a little easier to try to understand what's going on. But, you know, we did all the kind of market research and product research to understand where things were at and then got going pretty quickly, the team built a Raspberry Pi base camera, and we knew that wouldn't be the the ultimate product we'd go to market with but it did let us get experience with how to do, you know, really good video streaming, and what the back end might look like, and all of the infrastructure to build one of these systems. So do a rapid prototype really quickly, meaning like, you know, weeks and months, and then, you know, kind of go from there. That was the first step. So is this like raspberry pi, and then soldering irons? And yeah, you could do it. Yeah, exactly. You know, cases bought from who knows where and start putting them in.
Friends houses and people we knew had small businesses who would be willing to, you know, put some pretty unproven things in there, just to kind of let us get going and experiment. Very cool. So like another startup? Yeah, for sure. Very cool. And so
early days,
learning as you go, but then like innovating as quickly as possible.
How did you and your co founders kind of decide who's going to tackle what, how and yeah, I think
one of the nice things about the team is that we do have a lot of different
experiences in the past. James Ren and Benjamin workboats are great software engineers with with deep expertise in different parts of software. Myself and Phillip
I'm both, you know, engineering and product backgrounds, but also a little bit more business experience. So
I think what's ended up sort of happening is that,
you know, Phillip and I have have spent time in product and go to market, James and management have really focused on engineering. Got it, how we split things up. Very cool. All right. So I think you guys have kind of an advantage. You've mentioned that it's fairly easy to understand cameras and security. And you kind of have the world's greatest camera. But if you can't monitor it
doesn't work. Right. So you need to couple up the software and hardware.
How quickly were you able to confidently go to a friend or a friend of a friend and say, I got this? It's better than what you've got? Yeah, give me money. Yeah, we we saw
happy customers pretty quickly. And I think it wasn't quite for the reasons we thought we were surprised a little bit, I think
the things that people really wanted, were ease of use, you know, I want to plug this thing in. And I want it to just work.
If I want to be able to view my camera's on my mobile device, just as much as my desktop, I want it to work on, you know, even if the LTE connections kind of crummy, I want it to work. So really making it just work was was probably the thing that was most, we got the most pull. And we had started building computer vision and you know, analytics capabilities pretty early. And people definitely liked that. But what they want even more than that is something when when you plug it in, it turns green, and it works. And that was really what our first product did. It took us about a year to build our first complete product with, you know, finished hardware and
software of sufficient quality, though, we thought we could sell it.
And once we really put it on the market hired a couple sales and marketing folks, we saw traction really quickly, which, frankly, I didn't expect. I mean, my assumption going in one of these situations is that the first thing you build is probably not going to work. And then maybe the second thing even that won't work. But eventually, you know, if you stick with it long enough, you'll find something. And what was surprising about Verkada is that the first real commercial product that we came up with actually got some traction. And
that is fortunate more than anything else. And so we started selling it. And we I think within our first six to nine months wish at our first million dollar customer, which was also surprising.
And that's when we knew, you know, we really, we had found something that was resonating. Yeah, yeah. So as founders, you get that first million dollar customer.
You're, you're worrying about manufacturing, quality control, customer success.
What was it like for you, like, you get the start to get these big contracts?
Are you calling your other co founders or manufacturers? Do we actually have this like, oh, yeah, Helter Skelter?
For sure.
You know, certainly supply chain is a bigger issue now than it ever has been. But even then, you know, we, we, for sure ran out of things. Thankfully, we have a really amazing hardware engineering and operations executive, who we'd worked with in the past, and he was able to kind of keep up with us. So a challenge but not, you know, like a knockout type of scenario. Yeah. And is that here locally in the United States that manufacture? Yeah, we, we design all our products here. And then we use
ODM partners in Taiwan primarily.
So they they help us with, you know, the manufacturing and do that work. I would say one thing, when you do have a business that has hardware component,
you know, are you reusing sort of tried and true designs? Or are you really breaking new ground, and generally, especially early on, I think, for a young company, anyone out there who's thinking about doing a company with a hardware component, it is really helpful. If you're using designs, which are proven it just reduces risk and increases time to market and shortens time to market rather. And so generally, our I would say that Verkada is primary differentiation is software, it's really good software that runs on the device and in the cloud and apps. And on the hardware side, we certainly make premium selections, but we're not. We're not trying to say hey, you know, the reason you should go with a Verkada system is that we get, you know,
more megapixels than the other guy or you know, whatever it is we really try to put the emphasis on the software engineering, and that's where most of our
engineering staff is, and where we develop the most effort. Very cool. So you guys are building kind of the software on your own. And using proven hardware that is reliable and trusted. Yeah. Okay. And so your first foray was cameras. That's right. And then went well. How do you and your team kind of decide on new products? Is it like the difficulty scale? Is that the market size? How do you guys go about it? Yeah, that's a great Greg.
question, I think, for sure all of those things.
And we spent a lot of time thinking about it, I would say, the most important for us is what can we build something that customers are going to want, you know, that we think is really good. That's, that's how I think about it. And
it turned out, the next product we did decide to do was access controls have, you know, certainly been to buildings where people have badges, and they be able to select certain floors in the elevator, but not others. And well, you can get in between nine and 12, but not you know, whatever those things are. And it's one of those, you know, really infrastructure components that hasn't seen, again, sort of a ton of innovation, we looked at a number of options, but that one, we thought would be good, because we were pretty sure we could build something that was better.
Also, a nice tie in with the first product and that, you know, maybe people want to know, if there's tailgating going on, you know, one person badges into who will go through the door, that's a clear integration you could do with with video systems.
And so yeah, we spent about another year building that product, we had a great team that we forked off to go to go build it.
And, and got that to market. And it's been doing great. Yeah, and we sort of repeated that process a few more times. And one thing I also, I think, you know, from a strategy point of view, that's that's important is, are you having to create a completely different, you know, sales team, and we saw only through partners and channels? Is that going to see a lot of overlap there? Are your is your marketing going to be similar? And I think with, with that particular product, as well as the others we've done, there's a lot of overlap. It's never perfect overlap, or it's always some differences. But more or less, the folks that appreciated what we had done in video, we're likely to be the same people that would appreciate the other product. Yeah, yeah, access control works. I got here a couple of months ago, like at 5am. And it's gonna really get ahead of the day. And I'd given my car to an intern a couple of months previously. And I sent my truck,
my flowers, so it definitely works. And if you're on the wrong side of it, it's frustrating.
Okay, so you mentioned it took about a year for the access control. So you guys saw that market?
thought that it was
complementary to what you've already got?
How accurate? Are your forecasts on getting things engineered and programmed and done? Yeah, from an engineering standpoint, I would say probably like most people were optimistic. And then eventually, it takes a little longer.
But, you know, not too much longer, I think we, we try to take the approach of build something that's does a few things really well. And, you know, maybe not try to build the perfect thing right out of the gate. And then, you know, iterate from there on out, but include with a product like gaskets, control, you can't get to work. I mean, if you're letting people into buildings that shouldn't be there, or sending the elevator to the wrong floor or whatever. Like that's, that's not acceptable. So I think you start with a simple, a simple set of features that by themselves are really valuable. And then you add sort of more and more bells and whistles over time. And I think it can be a little tricky with some of these existing categories, where if you look at what is already on the market, and you can maybe pull up the data sheets from your competitors, and you're certainly Oh, man, they've got 75 things that they do. And it's going to take us four or five years to build the 75 things.
That that can be dangerous to do that, in a way I think you have to think more first principles like, well, you know, which of these things do I think really matters? And then ask customers and try to triangulate, because if you try to do you start to build something that does everything out of the gate? It's gonna be really hard to make that good. Yeah. And our overall engineering and product philosophy is like we want we want to under promise and over deliver, not say, oh, yeah, we've got it. But if you turn it on, it doesn't really work. So I think a lot of the art in, you know, getting something new out the door is figuring out, you know, what is the minimum set of things I can do to have something that's viable? Yeah. You don't want your salesperson saying we've got this, but you don't want it? Right. Right doesn't work.
So as you know, one of the leaders of the company, Buck oftentimes stops with you. So along that same line of of question, you set a goal for a year to have the access control. How do you manage as a leader, when you see it's gone a little bit slower? A lot of folks tendency is to everything turns into a nail, right, which could cause consternation or those people to leave or not enjoy their lives. How do you personally go about kind of managing if things are going a little bit off the rails? Yeah, um, I think gold is actually a great example because it was taking a little longer than we wanted. I think that
we try to keep our teams relatively small and also
