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Season 01 • Spotlight on AI
Season 02
Episode 014

1Password’s Jeff Shiner on balancing B2B and B2C customers in a rapidly evolving tech landscape

A conversation with the CEO of 1Password

1Password has been cash flow positive since day one, bootstrapping for 14 years before securing the largest Series A round in Accel’s history. What started as a personal project developed by two couples has grown into an identity security solution used by millions of individual consumers and their families and more than 150,000 businesses worldwide. In this episode of Spotlight On, CEO Jeff Shiner joins Accel’s Arun Mathew to discuss the company’s patient growth journey and how they balance the needs of vastly different customers in a rapidly evolving tech landscape.

This conversation offers an open look into Jeff’s learnings over the last decade as CEO. Jeff joined 1Password early on when the company reached 20 employees to lead its next phase of growth. Under Jeff’s leadership, the team has scaled to over 1,200 employees and tactfully evolved their platform from a consumer mobile app to a comprehensive identity security solution for businesses of all sizes. The discussion emphasizes the importance of purpose behind every funding decision, his vision for the future of identity security, and the impact of AI on it all.

Conversation highlights:

  • 00:00 – The founding of 1Password by two families 18 years ago
  • 03:30 – The strategic shift from a consumer app to a B2B platform in response to changes in the SaaS and security landscapes
  • 06:58 – Bootstrapping and the pivotal role of venture capital in attracting world-class talent
  • 10:22 – Jeff’s journey to becoming CEO and the evolving role of the founder
  • 29:15 – Insights on scaling and leading a remote-first, global team
  • 31:55 – How 1Password has incorporated AI into its products, and its role in the future 
  • 36:20 – The impact and importance of leadership on company culture

Featured: Jeff Shiner, CEO of 1Password and Arun Mathew, Partner at Accel

Learn more about Accel’s relationship with 1Password:

Explore more episodes from this season:

Read More

Arun Mathew (00:14):
Welcome to Spotlight On, I'm Arun Matthew and I'm here with Jeff Shiner, CEO of 1Password.

Jeff Shiner (00:19):
Great to be here. I think this is the most formal meeting we've ever had.

Arun Mathew (00:22):
Jeff, maybe for the audience, describe 1Password as it is today. I know it's in the name, but who are we? What do we do?

Jeff Shiner (00:30):
Yeah, I mean 1Password's in the name and certainly we started off as a password manager and continue to be an enterprise password manager, but it's pretty exciting to now say that we've extended beyond that into a more proper and full identity and access management solution for businesses and for people.

Arun Mathew (00:47):
1Password was founded almost 20 years ago, 18 years ago. And you joined the business 12 years ago, 12 years ago. Take us through the journey from when it was founded to where it is today.

Jeff Shiner (01:02):
Yeah, I mean there was two founding families, Dave, Sarah, Roustem, Natalia. Now Dave and Sarah were family friends of mine for well over 25 years now. I was his boss back when we both worked at IBM and they had started 1Password really for themselves. They had started it, they were building eCommerce sites at the time, and they needed a way to test the eCommerce sites faster, and that's things like logging in and putting in your credit card and putting in your address. And so they built this tool and the joke is it was a one month project and they spent one month build this tool that could help them fill and save. But when they did, so they started to realize this would be actually valuable for themselves, for their own real lives. And so they added the security side of it that they needed and started using it.

Well, they put it up on Shareware and lo and behold it started to sell quite a bit. And so that transitioned them into 1Password's our thing, that's what we're going to work on, that's what we're going to do. And then a number of years forward, back up to 2011, and it was a consumer app and it was an Apple app and they sold it through the app store and through their own web store as well. And they said, well, we're getting to 20 people. The company is bigger than they had envisioned and frankly bigger than they knew how to grow and scale and want to grow and scale. And so they decided at the time either they're going to keep the company small or they're going to hire somebody to go and lead and grow the company. And they reached out to me and I remember back then saying, I'm going to double the size of the company.

I'm just going to double the size of the company. It was always like, why double? Well, I can look at any individual who's there and I can say, man, they're doing a great job. I wish we had two of them. I don't really know that I would know what to do if it was like, yeah, we had 10 of them. So it was like double. They thought that was too big, but that was a long time ago. And so I joined the CEO and fairly quickly after that I started to say, we need to do things like internationalize. We need to say everybody needs a password manager regardless of where you're at. So then we started to localize and then we said, well, we need to have one for Android. We had a reader app before them, but we didn't have a real app and we need to improve the experience everywhere and we've always grown 1Password by building a good product, and supportting the heck out of your customers.

That's how we built it. So it was always listening to our customers and our customers were saying things like, Hey, what about us Windows folks? Hey, what about us Android folks? I've got a Mac, but I've got an Android device as well. So I started to grow that and that took us a few years and I started then to notice businesses were getting interested, and this was about 2013, maybe early 2014, and originally it was businesses were interested. They actually bought 1Password for their employees for Christmas gifts, some of them, which was interesting. But then they started to shift and say, oh, maybe we'll buy a copy of 1Password for all our employees to keep our business safe. That was the big shift in my mind. I'm like, we're going B2B now in order to go to B2B, obviously we need to have a B2B product, which again is at the end user is very much the same whether we're logging into something at work or logging into something at home that's the same.

But of course on the business side, you need to be able to identify who your business is, team capabilities sharing, and then all of the other stuff businesses need in terms of provisioning and de-provisioning and reporting and auditing and all of that sort of stuff. So I said we're going B2B, but the other thing we didn't have didn't have a SaaS app. We were just an app. I remember this, yes, you would sync through Dropbox or iCloud, and I think we had even met at that point in time. I'm like, I'm building a SaaS app, I'm building B2B.

Arun Mathew (04:59):
And I think I said, good luck.

Jeff Shiner (05:01):
Exactly. There was a talk I remember going to from Don Melton and Don Melton is again the founder of Safari and Webkit. And he said, how do you accomplish something amazing? And he said, you need two things. You need ignorance and hubris. And it's like if you know the problems that you're going to face, you'll never start it and you just need to believe that you can do it. And that was us. We were full of ignorance and full of hubris. We were going to do this. And so we set about, we built a SaaS app, we built a B2B app. It took us, I'll say a couple of years and in 2016 we launched 1Password for business, which when I look back at it now, it was kind of like 1Password for bowling leagues, but it was a V1 and we grew from there.

Arun Mathew (05:46):
But for a long time we were just admirers of the product, but we had a friendly relationship, but it didn't really progress to the point of investment until the B2B product had launched and the SaaS app had launched and you had moved to full subscription. And so the shape of the business looked very differently in 2018, 2019. Maybe take us to that point and when you started actually thinking about raising capital and what the reasoning for that was.

Jeff Shiner (06:17):
So from the very beginning, we treated it like a business. And I have a saying, like I say, there's a difference between a user and a customer. And I always think of it as if I go to my friends, my neighbors, whomever I meet and say, here's my idea. Do you think it's great? What are they going to say? Yeah, great idea, great idea. If you go to them and try and sell it to them, you may get a very different reaction. So from the very beginning, listening to our customers meant actually having customers that would pay for it. They would tell us what they liked, what they didn't like, and that's how we built 1Password and continue to build it today. But you can take that too far. Now, what it did mean is through all this time we were profitable. We hadn't taken funding to your point.

So the bootstrapped experience is a really good one for certain companies at least and for us. And so up through 2018, 2019, we'd continued to grow and I think we were about 150 people at the time. We had now, I think I'll say 20, 30,000 businesses that were using us on the B2B side. They were growing in sophistication. We were starting to grow in sophistication in the way of needing contracts and stuff like that. But we still didn't have a sales team. We still didn't have a marketing team. We were still very immature when it came to financing and HR and all of those sorts of things. And I said, it's time for us to grow and grow up. You can get a little too happy about being bootstrapped, maybe a little too proud if I were about bootstrapped, and it starts to hold your business back.

And so I said, I want world-class marketing. I want all of this, but how do I gain that? Well, you get world-class leaders to grow those orgs. Okay, fine. How do you grow or how do you attract world-class leaders when a company like ours is so private? Nobody knew if we had money or if we were growing or whatnot because we had never been public. We'd never raised money. And so I always remember thinking, we don't need the money for our day-to-day operations. And that's certainly you and I had that discussion, but now there was a need. Now this is a great opportunity for us to, and I fully admit, I will steal your term on this, get some courage capital, some money in case we want to do things, whether it's acquire companies or whatnot, but also be able to go to the broader market and say, yep, this is us. This is a real company. And that a round, which I think was the biggest round at the time for Accel, was a great opportunity to do so.

Arun Mathew (08:56):
Biggest series A we've ever done still to this day.

Jeff Shiner (08:59):
And that allowed us to go and attract great talent to go and lead and grow finance and go to market and marketing.

Arun Mathew (09:08):
So you didn't need the capital, but the validation that it offered and the courage capital to invest into the business was really the reason.

Jeff Shiner (09:16):
That, and to be honest with you, and Accel’s got a lot of experience that I don't have as we start to navigate the waters of a slightly bigger company, and that's tremendously valuable. Raising money always has to be for a reason. Sometimes of course, raising money is the reason, but to the extent you can, you've got to look at it and you've got to say, beyond the money, what is the value? And to your point, being able to go out there with the marketing moment to attract the talent so we can continue to grow. But then also being able to reach out and I say Accel, it comes down to people in my mind it was you, it was, and some of the others that you introduced me to that I could sit there and say, yeah, David Faugno at the time, right, you introduced me to David Faugno way back, oh gosh, probably 2019 as we were talking. And he was a tremendous resource for us back then. And as you know, a few months ago I hired him as my president and COO, and that's the sort of relationships that are truly invaluable.

Arun Mathew (10:22):
Talk a little bit about your transition in 2011 to taking over a CEO. It's not an easy thing to do to take over for founders. And in effect, you became a quasi founder of the business even though you weren't there since the very beginning. You sort of put the company on its trajectory to sort of the business that it is today, and it's a very tricky thing to do. But maybe talk about that transition and how that relationship has been over the last 10 to 15 year.

Jeff Shiner (10:50):
Yeah, it is definitely very tricky, especially in a case like mine where Dave and Sarah were friends, right? Because you have to navigate that line of I need control if I'm going to really take over, but you don't want to upset either the founders or your friend. And so there a lot were times when it was tough. There just were, but for the most part, that worked really well. So the five of us quickly got together when Dave and Risto came to me, they said they were looking for a CEO that was clear, and I understood it's not going to be me saying what to do. It's going to be the five of us. I think that worked really well because the last thing you want to do is sit there and say, Hey, I'm going to go and import a bunch of my stuff into this company when you don't really understand the company and how it's working.

So the five of us worked together quite well for a long time and we still work well together. We just don't work much together anymore. And that's the thing is over time a leader leads and you start taking on more and more of the actual leadership. And some of that happens just in terms of all hands and things like that. And you've been a part of them. Sarah and I always have kind of done that role together and continue to do that role together. Today was such a good time doing it, but there's also who's making the decisions and who do people go to for the decision? And so at the beginning when you're 20 people, you can do all 20, but as you grow, there has to be more structure and hierarchy. And that's where building that structure and hierarchy that rolls up to myself is important.

Now, as a founder role, whether it's Dave, Sarah, Rista and Natalia, they're going to come in and they're going to want to be able to have the influence where they think something is being done wrong and depending on their roles, whether their roles are formal, like Sarah, who leads customer support or informal, which is Dave and Emus founders, and that they're going to come in and they're going to say, I don't like this. They have to start to recognize that that can work when everybody knows you because they understand not only are you there because it's your baby, you invented this and you grew it, but also because you're there for good. Now, it doesn't always come across that way. It often comes across as, oh my goodness, a founder came in and yelled at us. And then chaos ensues, and that's where it starts to become difficult. And that's as the company really starts to grow, and it's more of a heartbeat of they're out now, they're in, they're out. Now they're in. And that's where you need to start having the discussions, which are, Hey, if you're going to do that, here is the path from which you can do that.

Arun Mathew (13:37):
Catch us up. Over the last five years, how has it been, it seems like the first phase of the business was two founding couples bootstrapped second phase, you came in and started to grow the business, and then the third phase you raised capital. And so how has the last five years been? What's changed in the business? What's changed with you? How do you view the market opportunity as you see it?

Jeff Shiner (13:59):
Everything changes every year, year and a half. It just does. You grow from 20 people to 40 people. Your world changes. I remember even at the time, we used to get everybody together in a circle and talk to them. And I remember at one point we got too big for the room. And so people instead of a circle sat themselves around the edges and we called it a sqircle, right? And then eventually you get too big for even that room. And so when I look at over the last five years, we did exactly what we had hoped to do with that announcement. We attracted a bunch of great talent, and Jeanie was my first hire as my CFO, and I think Julian was my second as my CRO and so forth. And now we've got world-class c-suite with all of the folks that we need or at least need for now.

I'm sure that will continue to change as we grow. We were 176 people I think at the end of 2019, which is when the round formally closed, and we're over 1200 now. So everything's grown in maturity, grown in size, grown in capability, not grown in ease. There's always a challenge. There's always the next thing. I think for us, I'll talk about two things. I'll talk about the additional financing and the value there, and then I'll talk more about our product slash company. When I look at it from a product company path, again, it was growing go to market and marketing and all of the fun things that come with that. But it was also how do we keep the company moving in the right direction as we go from some 20 people to now well over 1200. And part of what that is is for us is how do we c v to mature what we offer to our customers?

How do you do that? It starts listening to your customers. So from a product point of view, again, we've been a password manager for 18 years and we started to really hear from our customers, especially as a result of the last four years, and that the way business works has changed and the security risks have increased significantly as a result of that. And I think we've all seen that. So I look at it and I say whatever, 15 odd years ago when I worked at IBM, I'd had my lanyard, I'D walk into the lab, I would badge in, I would sit at my desk where my computer was there, I would type on my computer, which had a clicky keyboard and work on the software that IBM made available to me on that computer. So there were security issues for sure, but it wasn't security issues around me as a person, is it actually me?

Of course it was me. I was there, I was present. I was working on machines they knew and software they knew over the last 10 ish years, probably even more, SaaS has certainly come into play. The phone has taken up a huge amount of our life to where BYOD, especially for mobile devices has come. And then let's be honest, COVID hit a ton changed. And so now companies were completely remote for a period of time. Now we've been fortunate, we've always been remote. In fact, I remember talking to a lot of companies about how to be remote at that time, but companies from a security point of view, it's not that they didn't care about security, but it was like we just have to survive as a company through this period. We got to figure out how to work from home. We got to figure out what tools the people need so that they can be productive so the company can continue.

We'll do our best from a security point of view, but we'll catch up when we can. And we saw in 2023 the attempt at catching up to a large extent. And in particular, that's when people were going to get their folks back into the office. Things were going to go back to 2019, people were going to be in the office. We'd have a lot more control. And I think that was a spectacular failure. And I think we recognize that. And so in 2024, companies are now like, okay, this hybrid work environment's going to stay. And over the last, at least year, year and a half now, they've been reaching out to me saying, help us as they start to see this becoming more and more E, we've got our managed environment with the SSO, the MDM, we use Okta, we use Collide. But outside of that, there's all of this unknown set of devices that are being used and even broader, all of these apps that are just coming in from the edges, all of the SaaS apps now just come into the business.

No longer is it the SAP route of come in through a year three of implementation and being deployed out, oh, my friend saw Notion, I'm going to go and give Notion a try and see what it's like. And so that's the problem they've asked us to solve. So from a product point of view, we've spent a lot of focus over the last year and a half and have done some m and a to accelerate that to where now we can offer what we call extended access management. And extended access management is really, again, how do we combine that challenge that a business has of it's easy to be secure at the expense of productivity. It's easy to be productive at the expense of security. It's very difficult to do both. And so we do both by offering what we call extended access management, which is the ability to again, secure every login for every app on every device regardless of where your employee is.

So that's the product side, and that's been huge for us. We rolled that out at RSA, just what was that six weeks ago, to tremendous, tremendous applause. Which is exciting. Now we still got to see that grow and real business has got to take over changing users into customers, but it's very exciting. And now going to the financial side, going to the investment side, and I alluded to it a little bit in that story. So we took the A round, we had a small B round as Accel wanted to invest further, and then we had a big C round where we brought in more funding and some more folks. And through all of that, again, there's always what's the purpose of the funding? And as we grew, we continue to stay positive from a cashflow perspective. And because of that, we don't need the money again for our day-to-day operations. We're very fortunate that way, but our appetite has grown. And so now when we look at that additional funding and we've done a total of 920 million in total now through the three rounds, that gives us a huge amount of courage capital for us to do the m&a for us to look at it and say, are there big opportunities, big bets that we can make to accelerate that roadmap?

Arun Mathew (20:50):
It's an incredibly exciting roadmap and vision. I think it's so interesting because we don't have that many companies in our portfolio that start from a consumer place and then move into B2B and then extend up to the enterprise. And so when you look at your customer base, it spans individuals, small companies, small teams, medium-sized companies, big companies. How do you balance all of that? And the consumer side right now is the minority of your sales and revenue. I would argue many people know you as a consumer app. And so how do you balance those things between consumer and B2B between the single use case and the single person and the larger enterprise? It's a lot of potentially competing types of customers that you have to balance.

Jeff Shiner (21:42):
It is, and I won't say it's without challenge, but I look at it again and I say, what's the purpose of each? So let's look at it dramatically and say, ah, forget that consumer business, we don't need them. Well, if I'm going to not have a password manager at home, just go all the way to the consumer, what am I going to do? I use Fluffy Cat for all my stuff at home. Guess what happened? I'm bringing into the office regardless of what tool they give me, we using Fluffy Cat in all of my things in the office. And so that we start to sit there and say the purpose and the value of having 1Password out to the consumers starts to have value because it completes our solution from a security perspective. More than that, I want people to have 1Password on all of their devices so that when they're working at the office with their company issued computer, that's one thing.

But then when they go home and it's that iPad that's beside their bed that maybe they mostly use for games, but maybe they've got Slack installed on it and Slack for work. So if they have the 1Password app on there, they have all of their home stuff, they just simply add their business account, they can log into that and stay secure. So there's a real value to me, a value to the BB side now then we're going to look at it from a financial perspective and say, should we be looking to squeeze every dollar out of the B2C? And the answer to me is no, because the value is not am I going to significantly grow ARR by getting more consumers? That is really a flywheel effect and it is part of the moat. So then I start to look at it and I say, what are some interesting ways we can still assign value to the consumer side, but in effect give it away for free?

And so as you know for a business account, if you have a business account, every employee at that business gets a free family account. It's completely separate from the business account, but it's a way we can give it to them for free. And then you've got that one person who brings it home, gives it to the rest of their family, and maybe their family works somewhere or maybe they shift jobs. So there is a flywheel effect as well as a true security benefit. So it's about what is the value to each part? And I think if you find that the value to each part is the same, then you have trouble and you have to start specifying and saying, what is my ideal customer profile so that I can focus my message and go to market and product there?

Arun Mathew (24:08):
This to me is part of the difference of 1Password versus most other companies, is that you take a very holistic view of your customer in that it's not just protecting their work applications or devices. It's not just protecting their home, but it's protecting the person and they're at work and at home, and you have to be everywhere they are. And so that human-centric approach that you have, I think is partly what defines you and differentiates you in the market and also why you've had such a clear focus on UI in UX and making it easy to use for even my mother uses 1Password, but if you can build it for the least tech savvy consumer, then it makes it that much easier to adopt and use it in the enterprise or in a different sort of context. And so I think that's part of the secret that you guys have developed over the last 18 years.

Jeff Shiner (25:03):
So again, part of it is the biggest part for me is listening to our customers. The customers will tell you what's right or wrong with your product. Doesn't mean you should always listen to them, but it doesn't mean you have to follow on what they're doing. But if you look at security in general, in general, security apps don't give much to the end user. If anything, they add friction. You look at things like Capcha, how annoying is Capcha? Please click on all of the buses and they've got one bus across the whole nine things. And you're like, is this little corner of the bus in this square? You understand the purpose, but it's annoying. What we understood from the very beginning as a consumer app is if you want somebody to adopt what you're doing, you have to give them something. And it can't just be, Hey, we're giving the business something so you must use it.

You have to give the human something, the person something. And to your point, it's amazing how many times we forget that the employees at a business are people, right? I know we all know that, but we forget that at times and we'll talk about B2C and B2B as if they're, I'm like, so am I work Jeff or am I home, Jeff? And maybe here I'm work Jeff. No, I'm Jeff. It is a weird thing. So I do think we have to look at that, but you have to look at it and say, what am I giving the person who's using my app, not the person that I'm selling my app to, and we got to give them something too.

Arun Mathew (26:40):
For a lot of the founders that are listening to this, if you were to take yourself five years ago, is there any advice you would've given yourself then as you approached taking funding and being on this part of the journey?

Jeff Shiner (26:52):
I think two things that always hit me. One, and you've heard me say this before, I took funding too late. Again, we will tell people, oh, we've been bootstrapped for 14 years, and they'll congratulate us on that. And like I said, we can almost become a source of pride and you don't realize there's a ton of value if you take the funding and you have a purpose for it. And so I would say that look for those purposes earlier. It doesn't mean you have to take it day one if you don't need it, but look for those purposes earlier. Again, it's easy to have a rear view mirror, but man, I would love to have started this path and been grown and grown up a little earlier in this path. So I would say that's one I say. The second thing though is you have look at, you always have to have a purpose for your funding that goes far beyond the money.

And that comes down to are you picking a person and a VC because they're offering you the biggest amount? Big mistake. You need to look at what you're going to get from them that's above and beyond the funding because that's the value that's going to either add nothing or add a ton from a duration point of view. I remember when we started talking well before the actual funding, and one of the things that really attracted me to Accel was things like Atlassian and the fact that Atlassian, and I remember you had me speak with Mike and Scott, who I continue to speak with today, and it was like they followed a similar path to us and you were able to show us that and to, I was able to talk to them and say, what was the value? What would they have done differently? And things like that.

Even in the series C round when we had all of these fun, Ryan Reynolds, and that came along with us and others, and it was, why did we do that? The purpose? Well, the purpose to me is a marketing one. So you look at it and you say, what would it cost for me to pay Robert Downey Jr. And Ryan Reynolds and Trevor Noah and Mary Barr and all of these others to even mention 1Password? Here, they're giving me money to be part of the round. And so I think you always have to look at it and you say, beyond the actual dollars, what's the purpose of the round?

Arun Mathew (29:15):
I think that's really good advice. You alluded to this earlier, but when Password has always been a remote first company, well before, it was cool to do that. And I do think Covid changed the dynamic for a lot of businesses. Many of the companies that we're investing in today are remote first or remote only. I think when I look at mature businesses that are remote first from the very beginning, they operate in a very different way. And so could you talk a little bit about the principles by which you operate a 1200 person organization that is remote first with employees all over the world?

Jeff Shiner (29:55):
Yeah, absolutely. And to be clear, we don't do any of this perfectly, just it's a work in progress. Let's have that open there, but it's not going to be a big surprise. Communication is going to be key. And so I'd like to say we still do this. We don't. We used to take everybody on a cruise. You came on a cruise with us once you actually left early.

Arun Mathew (30:16):
Well, it was a month before the pandemic hit.

Jeff Shiner (30:18):
Well, that was, but that's not why you left early. But yeah, it was admittedly a month before we used to take everybody on a cruise back when we were a hundred people in that. And today it's more teams that meet together. In fact, here in New York this week, we've got our customer experience team that are meeting for their offsite. So communication is key. And what we try and do is how are the ways that we can make it very clear to everybody in the company what the purpose is? And that is very simplistic. So we've got our four themes, which are critical to our company for this last year and through the end of 2024. Those are the four themes that everybody knows. We talk about all the time and everybody is doing work towards. Now. Of course, that's never, ever true. You've got your tax people who are paying taxes happily.

Taxes isn't a theme for us and stuff like that. But in terms of the folks that are, when we look at it from it's go to market, finance project, whatever, everybody understands the purpose of the business. It's just something that we repeat over and over again to the people about why this is important and that this is our focus. Otherwise, it becomes very quickly the case that people have a general understanding of what we're doing, but they're all off just sort of flying two degrees away from each other. Rarely do people fly off 90 degrees, but you're flying off two degrees and you have 1200 people and every month that's another two degrees, 90 degrees happens pretty quickly.

Arun Mathew (31:53):
Communication, it's key. I'm surprised it's taken us this long to talk about AI, but maybe let's touch on it. Are there applications of AI within 1Password as a company or ways that we're thinking about incorporating AI into our product that really excites you that we're starting to work on?

Jeff Shiner (32:16):
Yeah, I have. I have lots of sayings. They're not all that meaningful, but the one that I like to say is give meaning to data. So when we look at it today, we've got, so a good example is you've got a ton of stuff in 1Password. That's great, that's keeping it safe, making it available. But then we introduced, now there's no AI in watchtower, but we introduced watchtower a while ago, and that's giving meaning to data in the sense of here are the ones that have weak passwords or reused passwords. There's something about that data that's meaningful to you. And AI, I think can do a ton of that in a way that doesn't in any way negatively impact the privacy or security of your data. And we can do that by building models exterior. So for instance, one of the things that's been in 1Password for many years for probably three, four years at least, is we have an ML model is what it was called at the time.

But think of it as an AI model that we trained to understand what a webpage looks like so that when 1Password goes to web, when you go to a webpage with the 1Password extension, it'll say, oh, is this a signup page or a sign in page? Because if you're signing up for something, we're going to give the email address and we're going to recommend a password. If you're signing in, we're going to do an email and your password. Just silly things like that. And of course, no two websites on the face of the earth have created the same page. And so we have this ML model that goes through and tries to figure out which field is the login, which field, and so on and so forth.

Arun Mathew (33:48):
Are there opportunities you see to charge customers to actually monetize some of these AI features or are we still in the process of figuring that out? I think that's a question everyone is wrestling with. There are use cases that seem really exciting, but is there an opportunity to match the investment required to get there? And are consumers or businesses really wanting something like this?

Jeff Shiner (34:16):
Two things I'll say about that one, I often get asked what keeps me up at night? And it's like, which competitors is, I always say the same thing in all the media interviews, and it's like what keeps me up at night is can we move at the speed of technology? So before I worry about can AI add yet another level of revenue generation, you have to look at it from a standpoint of if I'm not using AI, I'm going to just lose. I think it's going to be that transformative that quickly where if you're not leveraging AI, rather than worrying about how you're going to charge money more for it, are you going to make money at all? Now that said, if there's ways to make money from it, to me that's in the good, better, best. Can we offer capabilities in the tiered good, better, best that people will find valuable so that they continue to upsell to the top tiers?

I don't yet see an opportunity where we are selling AI bundle one. I see it more as AI is an enabler to business capabilities in our case security business capabilities that we would sell. And so if you look at it, things I could do around shadow it. And so again, here's your shadow it, here's your list of all of the apps that are being used in your business. Well, that's a lot of data you're not going to know to do with it, so you're not going to do anything with it. If we can find a way that we can intelligently share with you that data in a summary form or subsets or in terms of a way that is predictive of risk or things like that, now that has a ton of value. I mean, if we want to throw AI in the title of that so it's flashy and people get excited, that would be the purpose of it. And that's probably a 2024 thing, but it's more about assigning the business value that will come from AI. So I think AI is going to be instrumental in just about everything. I dunno how long AI is going to be sold with AI in the title.

Arun Mathew (36:17):
I agree with that. Okay. It's time for the retrospective questions. It took you 14 years to get to 170 employees and then five years to get from 170 to 1200. And I imagine you've learned a lot about hiring and firing executives and leadership. Are there lessons that you have in your mind, particularly over the last five years about hiring the right person, the right leadership for the right stage?

Jeff Shiner (36:47):
Yeah, it is exactly that. It is for the stage. So there's two things. Attitude and aptitude matter. Attitude and aptitude matter tremendously. People sometimes talk about our company has a culture. No, your company's culture is going to be defined by the people in your company and in particular by the leadership of your company. So if you hire somebody who has a particular approach or attitude, you will want that to be positively additive to your company's culture. And so you have to be careful there. And so you may hire the world's best whatever sales leader, but if their culture and what they care about is different than the companies, either it'll change the company's culture for the negative or they'll just be headbutting to the point that nobody's happy. So attitude and aptitude is first and foremost when you're crafting the senior leadership team. I think the second thing is you do very much have to look not just at what the person says they're interested in, but what they've actually been doing.

And does that relate to the stage of your company? So if you hire somebody, for instance, who used to be an operator, it's a little bit like the board. As we start to look for independence on the board, do you want somebody who is a professional board person and they've been on boards for the last 10 years and they're going to help you understand how to have a board and things like that? Or are you looking for somebody who's either still is or has just very recently been an operator so they can sit there and challenge you in that position? And it's going to be the same thing with your senior leaders. If you're looking at, say, a chief marketing officer of a company and you're 150 people or 500 people, you still need that person to be down in the weeds and actively growing your marketing org. So even if they've done that seven, eight years ago and are interested in doing it again, are they close enough? Have they stayed close enough to where they understand how to do that in 2024? Do they know how to do that in 2016? We've got two of our execs in California, one in Seattle, two up in Montreal, two of us in Toronto, and one down in DC. So we bring ourselves together every six to eight weeks. And I think you have to spend that time. Humans are still humans that want to talk.

Arun Mathew (39:17):
When you think ahead for 1Password and for the security industry in general, what excites you? What are you most looking forward to?

Jeff Shiner (39:26):
I think what excites me is always we can make a difference. We can help a company and there is something to be said. You look at whether it's AI or even extended access management, these are new 2024 problems, and companies get excited about the new, even from a security point of view, oh my goodness, how are we going to protect ourselves from AI and how we're going to protect ourselves? And yet, some of the most serious problems are the ones that are just decades old. The vast majority of actual threats to a company are things like people. And that's what we're here to help. We're here to help people. So I think from, when I look at it from a future point of view, there's a tremendous opportunity we have to grow as a business to be here three years, five years, 10 years from now, much larger than we are today, and much more impactful than we are today. And that's one of the things I like to talk about is we have to hit above our weight and we have to weigh more, we have to be more impactful. And as we continue to grow as a company, that gets easier and easier to have a broader scope with which we can impact in a positive way. And I think that's tremendously exciting.

Arun Mathew (40:34):
Well, we're off to a good start. Thanks for joining us today.

Jeff Shiner (40:37):
It's been great to be here.

Meet your host

Cloud/SaaS, Enterprise IT, Security

Arun Mathew

Arun Mathew is a Partner at Accel. He leads growth investments in the enterprise, security, and infrastructure markets.
Season 1 of the Spotlight On podcast, by Accel
Growth Stage

Growth Stage