Building Verkada, the $4.5B Physical Security Company | Filip Kaliszan, Founder and CEO

One of the things that fascinates me is just how AI will reshape how we interface with the computer, right? So we're used to doing what I just did, which is tapping and clicking and moving around. But we're certainly at the cost of, I can now tell the computer what it is that I'm trying to accomplish, and the computer can accomplish complex tasks for me and just give me the answer. And that is something that, you know, I'm very excited in the context of physical security, especially since there's actually a shortage of physical security personnel, right? So physical security is in guards, first responders. It's one of the largest employment categories, and there is a shortage of labor of people who are willing to do these jobs, and they are scary jobs, right? I mean, like you're, you know, it's stressful, it's nerve-wracking, you're responding to real situations. And so I think the more we can make the, you know, the technology sort of seamless, and it just works, it disappears, and it makes that personnel better, more efficient, less stressed, more prepared for that situation. I think the better outcomes for the world. Welcome to the PEO. I'm your host, Turner Novak, founder of Banana Capital. Today's guest is Philip Callison, founder and CEO of Recada, the physical security company. Recada started in 2016, building the best camera for physical security teams. Very quickly, we realized that actually, you can iterate very quickly on hardware. The company has since evolved into a full suite of security products for buildings. The way we think about the company is, as time goes on, we'll add more categories. We'll bring all of these systems into a unified single pane of glass software experience. Philip takes us inside for Cotta's rapid growth to almost a billion in annual revenue, over 2000 employees, and raising capital from investors like Sequoia, Meritech, First-Round, and General Catalyst. Your biggest limiting factor is, how quickly can you bring comfort in people, train them up, and help them drive your mission. We talk about how LLMs are changing hardware, the power of customer therapy. - They just give us the energy. Like when things go sideways, that is the best possible motivation to keep going. - Have Philip iterated on early startup ideas, inside for Cotta's very difficult first funding round. - It wasn't just like, hey Philip, this idea is not so good, so here's a term sheet, and it's not such a good term sheet, but there's a deal to be had. It was like, this idea is so bad, that we're not even gonna consider giving you any money. - How signing their first big customers changed the trajectory of the business, and how to think about adding new products over time. - We're on a Zoom call with a customer, and they're like, yeah, we need a thousand cameras. Well, I only have 250 in my garage, but we're gonna crank up production. - We all stock up for Cotta's commitment to in-person work, and how you should evaluate joining a startup. - Joining a startup as an early employee, probably on average, is like a wrong decision. - We also get into their software zero employee bonus policy, and why they built a bar on their office roof. Before we talk to Philip, I wanna apologize for the train you'll hear quietly in the background, we shot this in Philip's office, which was a great setting, but also don't want anyone to be confused looking around for the train if you're listening to this on the go. A quick reminder that I publish your episodes of the peel every week. Check out the back catalog of almost a hundred episodes exploring the world's greatest startup stories, just like this one, and subscribe, wherever you're listening, so you never miss an episode. Now, a quick word from numerous before we talk to Philip. This episode is brought to you by Numeral. Numeral is the end-to-end platform for sales tax and compliance. They handle registration, ongoing filings, and their API provide sales tax rates wherever you need them, with all the intracurations you need. Numeral sports over 1,000 customers in both the US and global, and they pride themselves on white glove high touch customer service. Plus, they guarantee their work and they'll cover the difference if they mess anything up. The Fresh Out of Fundrays, raising an $18 million series A for my friend, Chathen Pudaganta at Benchmark, if you wanna put your sales tax on autopilot, check out Numeral, at numeralhq.com. That's n-u-m-e-r-a-l-hq.com for the end-to-end platform for sales tax and compliance. - Now, let's talk to Philip. - Philip, welcome to the show. - Yeah, thanks for having me. - I'm excited for this. We're in your office right now. I don't think this is my first time doing this in someone's office. This is a pretty cool spot. Can you just real quick tell us what Vercott is for people who aren't familiar? - Sure, yeah, we're addressing a, what I would call a very important problem in the world, which is safety. It's the safety of the physical world. It's the safety of the communities around us and it's safety of literally all the places that, like you and I and everyone else goes to every day. And we address this problem of safety through technology, specifically, we apply software and artificial intelligence to things like cameras, access controllers, air quality sensors, alarm systems, and we put it together in one simple unified platform, which enables the physical security personnel, the responders to fundamentally do a better job of keeping people safe. - And so, I know we were gonna do a demo. Can we-- - Yeah, real quick, well. - Yeah, let me show you. - I mean, she's in action. - For sure, I mean, I think it's always the best way to show Vercott to someone is to just show them how it works. So you're looking at our office on my phone and actually let me start recording my screen so that you can show it to folks. So you're looking at live cameras at the office. This is the front door where you came in. And the first thing you'll notice is, you know, we got the basics right. Like the video is loading quickly. We're in my browser right now. So this is not even the native app. We have a native app, but we're in a web view. It's loading, it's seamless, it looks good. We automatically, you know, pick all the settings, the color quality, so I'm a photographer. So I care deeply about, you know, image quality and I drive my team hard to make the images from our cameras look beautiful and choose the right lenses and sensors and so on. So you're looking at live video. You'll notice some cool stuff as I scroll down below. These are literally the individuals that walk in front of the office. This person is prominent here. You can see the exited office and they walk there. And you look at the next one, you're like, man, like there's nothing going on here. It's actually a really tiny guy far away there. So we double down on people detection, vehicle detection, being able to search for people and vehicles, and it's amazing. It just makes the work of, you know, safety personal that much easier. I could look at a view of all the people who've moved in front of our office. And so now these are images of all the individuals, you know, for any one of them, we could probably find you if we know which way you came in. But for any of these-- - That came in that office. I came in from the other side, yeah. - Yeah, well, so anyway, you get that, yeah. But for any of these, you could tap in. You could view that live video of that person walking, you know, you can zoom in, you can send this clip to someone else. So it just makes the work of personnel that's in charge of safety so easy, seamless. It's at their fingertips, it's on their phones, on the go. And then let me show you a couple of cool things we do as far as like artificial intelligence beyond just like people detection. So we integrated in our search large language models. So we combine a large language model with a large vision model. And so now you can search for virtually like abstract queries. So I could say for example, show me cars made by Elon Musk. And hopefully that will show us some test laws driving around the market. - Have you ever shared this before? - You know, I always try to come up with a different query. And it's always like, you know, like-- - But I like real demos and you'll see it takes a little moment to produce the results. But, you know, sure enough, we have a red cyber truck, which is pretty cool. I know some employees have cyber trucks, but not this red one, so I don't know where that one came from. But you get the idea. - Man, that red cyber truck is in there a lot. - I mean, so it must be someone who lives nearby or maybe it is an employee. But the cool thing here is, you know, we made this query. And it's, you know, as I'm showing it's fairly generic. So I could search for garbage truck. I could search for, you know, let's try, you know, people wearing safety equipment. Yeah, I'll complete work there. I could definitely see if I was like working on some kind of public safety thing and it's like, it was just, it was a guy in a white hoodie. - Exactly. - That's the idea. It's a guy in a white hoodie that did the thing. You probably don't have his face. And, you know, you have, for many of our customers, hundreds or thousands or even tens of thousands of cameras that they're managing. So this is just a better way to get to the starting point of like where you might start the investigation. So these are all people wearing, you know, what looks like safety equipment. You know, it's not always 100% right? But it gets you the starting point, which is really neat. The other really cool thing about this is any of these type of search queries can be turned into a proactive alert. - Oh interesting. - So these, these results, you know, they're indexed in near real time. And so I could now go into, you know, another aspect of our product, which is our alert inbox. And I could create, and I don't have any alerts set for this org right now, but I could create an alert that, you know, responds to a particular query. And, you know, sends me notifications as those things happen, right? So in our own office, we have actually alerts tied to the little retail shop that I showed you. So I could show you how that works. This is HQ Checkout. So this is our retail shop. And here you're seeing videos of all the transactions that happen in our retail shop. And so you can tap into one of them. And you can see up this person, you know, you see they're transacting at the cash register. And then we ingest the metadata. So there was a discount, it was an employee and visitor discount, 20% off. And they bought some gray sweatshirt or whatever in Excel site. So here what we're doing is we're integrating with the point of sale. And so now if you're a retailer, all of your video can be tied to all of your transactions, which is tremendous for our retailers. So. - What's an example of that? Like why would I want to do that? - Yeah, so let me give you kind of a couple of examples. High value return transactions. So it turns out there's a lot of fraud around someone's returning a expensive, you know, bag, handbag or something like that. And then the question becomes like, well, did they actually bring the bag back? Was the cash register person maybe on the scam and, you know, the bag got lost? I mean, and that's a real, you know, that's a real thing that happens in the real world. It's like, yeah, we processed this $4,000 return. Oh, the bag got lost, like, where is it we don't know? So with, you know, with this kinds of integrations, you can, you know, you can have the store staff and the store manager see these things seamlessly on their phone in real time as they're happening. And it's just, you know, kind of awesome, right? Like they, without having to, you know, kind of do a lot of work, they have visibility into what's going on. And, you know, they can supervise these high-end transactions. That's like one example of many that we would support as an integration. Okay, that's pretty cool. Yeah, I think we, I mentioned this earlier, but it sounds like you basically, the story of Ricotta is just pretty big market with a lot of use cases. You can use cameras for a lot of things, but people just have not really done much with it, with software. And you basically made cameras that are very tight in software. And now there's probably a lot of opportunities with AI too, and that's one of the sounds. 100% and I think, you know, that the story for our customers, it always starts with security. And it's interesting if you think about, you know, banks, retail locations, you know, cities, parks, police stations, like you name it, cameras are there. And so I think the decision to buy cameras that existence existed for a while, but what you can do of the system, like the possibilities are super awesome. And we're seeing a lot of, you know, really cool use cases that come out of the fact that our solution is just so approachable and so easy to use. And then more staff can safely interact with it. And that's a big deal. - I mean, I could even see the retailer, someone comes in the store and doesn't buy something, and you recognize who they are, and like you send them a text with a deal. - Yeah, yeah, yeah. - And I come back. - Yeah, I can see that. - Yeah, well, and so that's interesting, right? So we, it's actually great that you thought of that type of use case, right? Because most people think of like, oh, recognizing people is always about catching the criminal. - Yep. - And indeed, we have some customers, for example, high-end hospitality customers, where they will recognize the VIP, right? And so if you walk into that certain location where you are frequent visitor, we can, in certain locations, we could recognize you, we could prompt the manager to come greet you, give you a more personalized experience. And that's kind of like an example of a great use case that stems from the security system, but it's not necessarily a direct physical security safety use case. It's a customer experience use case or a manufacturing or retail efficiency use case. So those things are pretty exciting. - Yeah, I feel like that ties into just all the opportunities with AI just in the real world. We've probably all seen like, you know, better Google quote-unquote or like, something like the basic stuff, maybe like making coding a little bit better. We kind of know that's gonna happen, but there's a lot of opportunities where can you tie a large language model into the real world and first big use cases might've been self-driving cars, but then it's also like better customer experience by like, or robots. I think we were talking about earlier, like there's like a robot that takes ingest things in and does something based on what it sees. Like there's a ton of different ways that that's gonna play out. So it's kind of, it's an interesting space. - Yeah, and look, I'm fascinated about the progress. I mean, I think it's like frankly, it's a privilege to live in a time when so much is changing so fast, right? So I'm like, embrace the change, see what it drives and see what we can do of it. You know, I love product design. I'm a product builder, like engineer by training. You know, one of the things that fascinates me is just how AI will reshape how we interface with the computer, right? But we're certainly at the cost of, I can now tell the computer what it is that I'm trying to accomplish. And the computer can accomplish complex tasks for me and just give me the answer. And that is something that, you know, I'm very excited in the context of physical security, especially since, you know, if you think about this industry, there's actually a shortage of physical security personnel, right? It's one of the largest employment categories. - Really? - And there is a shortage of labor of people who are willing to do these jobs and they are scary jobs, right? And so I think the more we can make the, you know, the technology sort of seamless and it just works, it disappears and it makes that personnel better, more efficient, less stressed, more prepared for that situation. I think the better doubt comes for the world. - Yeah, and if you just give them better tools, right? Like if you think why do people want to be, why do they want to work at Facebook or work at a company like Farcada? - Yeah. - 'Cause you have like cool stuff, first is, if you're working in security, you know, you think of late nights in the streets, bad environment, and if you're in the back office, or if you're the one behind the keyboard, like in the basement, hidden, like it's not exciting. So like giving them better tools actually makes that more of a fun job. - Well, 100%, then I think we, you know, we often actually think about that when we design our products, or when we design for that persona, it's like, okay, what are you on the go? Or you're in that, you know, security operation centers and maybe you're watching the screens, you know, how do we make that an engaging experience that's easy to interact with and help you accomplish that, you know, that goal better. - Yeah, and you have, I think going back to like early, early days of your life, I know you have a pretty strong connection with cameras, like when did that start? - Well, you know, I think, so I have liked cameras for photography. So even as a little kid, I growing up, my dad used to take family photos, and I think, I don't know, maybe I was five or six or seven, but I remember, you know, we would sit together after a trip and, you know, back then it was film, and you'd get the photos developed, and my dad was really good about, you know, only keeping and choosing the good photos and not keeping everything, because you just get overwhelmed with, you know, like, - So this was, this was in the film days. - This was in the film days, yeah, like when I was a kid, and so that's, I think, was my introduction to photography. So I began, you know, appreciating, okay, how do you frame a shot? How do you take a good picture? And what is a good picture versus what is a bad picture? In high school, digital cameras came out, and I think, you know, I always set a passion for computers and engineering, and when the digital camera came out, you know, those two things combined, I started doing sports photography, which was highly technical, and got really into it. - Sports. - Oh, everything, like literally every competition that the school would have, you know, I'd be there shooting photos, and, you know, I would give it to our school yearbook, and then to the other schools that participated, and so this was like, yeah, like the first real way in which I utilized it, and then that passion actually continued through my colleges at Stanford. So I also shot sports at Stanford. And, you know, it was interesting when we started Vercada, you know, initially the idea for Vercada was around video security specifically, right? Today we're a platform for physical security, powered by software, but at the beginning, it was just, hey, can we build a better software-driven, modern enterprise camera for, you know, for kind of commercial buildings? - Yep. - And you'd be surprised, like, so much of the knowledge of how a typical camera works, you know, lenses, aperture, you know, focused sensor quality noise, all the way down to, like, how does the encoder work? That intuition around that proved very valuable when we were designing our first products. - And then what's kind of the story with coming up with the idea of doing an issue? I know you'd kind of done another startup that you sold a cheque. I don't know if that's part of the story normally, but how do you usually kind of explain just like the early days of getting into it? - Yeah, sure. I'm a builder. I love building stuff. And I think concretely, I like building stuff that's useful to others. Like, I get up in the morning because my customers are telling me that they're using my stuff or because I look at the metrics on one of our dashboard. You saw all the crazy dashboards all around our office. That is awesome for me, right? So if I see that something I built is being used in driving value every day, that gets me out of bed more than anything else. That's who I am. And so, you know, leading up to Vercada, we were looking for what to build, right? And I've had a little startup before. I sold it as you said to Chagg. So I knew I wanted to start a company again. I was ready for that risk for that journey and I convinced some crazy friends to quit their jobs with me and work on ideas. So we're working on, you know, a variety of things. And I think one of the best things we've done, we actually, we gave ourselves a year of time to pick the right idea. And we worked on a variety of different things in about six months into it. We came across the video security sector, specifically in enterprise. - So I'm curious just to kind of jump in and make you go a little bit deeper on that. - Yeah. - How do you recommend that somebody explores ideas? 'Cause it sounds like you didn't know what you were going to do, but you wanted to do something. - Yes. - So it almost sounds like that could be an unstructured process, maybe. - Somewhat. - How did you do that? - Yeah, so I mean, I think you have to be, you know, I think you have to have a level of sort of self-discipline and commitment and maybe set some guard rails around it. So what I did concretely was, I think it was the end of 2015 beginning of 2016. You know, I had, with my job, I've convinced another buddy of mine, one of my co-founders to quit his job. And we told ourselves, like, look, we'll take one year. And in one year, I dare we will come up with an idea and incorporate a company and go after it. Or if we don't find them, we'll go back to the market and apply for regular jobs, if you will, right? So, and that year constraint was, you know, in our case, it was sort of, like, dictated by our financials. Like, that's how much time we could take without being employed with, you know, some savings. And then the next thing we did from there, which I think, you know, was very counter to maybe the first time around when I did my first startup was, you know, I think at that point in life, I realized that a lot of what you build as a company is, it's about the execution. So like, people always think, oh, it's the idea and the idea has to be secret and, you know, don't tell anyone. I think for us, it was the opposite. It was, it's going to be execution, you know, ideas are valuable, but it's how you build it. And is it the right idea for you, the founders? So, I think one thing we did well was we, we were just very open. Like, we would work and think of different ideas. We would tell everyone about them, our friends, our advisors, you know, anyone we knew in the business space or venture investors. And then, you know, sort of one thing leads to another. You explore one idea, maybe it's good, maybe it's bad. And throughout the process, we tried to be very disciplined in terms of getting together every day, putting in 10, 12 hours a day, working on stuff, building prototypes. And we built a couple of things. Like, like everyone else, I, you know, I'm a photographer. So of course, one of the first thing I did is I built a photo sharing app, which there's a million on the internet. - And this would have been in like, 2016, okay? Yeah, this is like leading up to the start of Verkada. - Okay. - So, you know, it's like, okay, yet another Google photos Instagram type app, which we actually built something, you know, somewhat cool. We got maybe a hundred friends using it. And then we're like, ah, but it's a very competitive space. But the cool thing about it was in doing so, we sort of refreshed all of our memory and state on computer vision. And that actually then became a building block to Verkada when we started talking about cameras and, you know, in the kind of commercial space. So, you know, I think it was time very well spent. Like I would actually, you know, highly recommend that approach as a, you know, give yourself time, give yourself space, explore a couple of ideas, maybe go deep on a few ideas, and then feel okay to scratch them. Like if it doesn't make sense, or if it's too competitive, or the market is not the right one, you know, move on to the next idea. - Yeah. - And that's sort of how we landed on Verkada about six months into that process. - And you were specifically, you landed on security as a market. - Right. - So I think if somebody, maybe at the time, 2016, if I were to hear somebody to say, you know, I'm starting a company in this security market. Like I would just say-- - Physical security. - Physical security, I'd say, "Huh, that's interesting. Good luck." (all laughing) 'Cause an investor I might say, "Ah, not the most exciting on the surface, so what was it that made you really say, okay, there's a big opportunity here." - Yeah, so it's funny because I think exactly what you said is exactly what happened. So we. - Maybe we can tie the fundraising story into this too. - Right, right. So basically, you know, here's how it goes. We, I'm a nerd, right? So I have all the gadgets in my house. I love them and, you know, I play with all the toys. So to speak, right? So I have my nest cams, my rings, my, you know, everything from an air quality sensor to a sleep tracker to whatever. And all those things were, you know, kind of becoming ubiquitous and cheap and easy to use around, you know, that's sort of 2014, 15, 16 era. So, and those products are good. Like, frankly, you know, they're great and they're awesome to use. - Yeah, rings amazing. - The rings amazing, nest amazing, you know, and it was initially drop cam that I remember having. So, you know, I think those types of gadgets sort of like paved the path. They're like, it's possible to do really cool stuff. And, you know, I think as a software engineer, you quickly realize a lot of the reason those devices are cool is like, the software experience around them is amazing. And it's leveraging, you know, what we then called computer vision and now, you know, a lot of people would refer to as AI. But, you know, sort of these types of techniques, right? And so, that's like a thread that was going in my head. And then, you know, one of my co-founders Hans and I had experiences with commercial camera systems in different settings. So, again, being a nerd and a person who likes all the stuff, at some point I decided to put in a commercial grade camera system on my home, not because I, you know, I felt unsafe, but because I just wanted to check it out. And that's kind of a cool thing to just like install and set up and use. Like, it's just fun. Yeah, exactly. So, I was remodeling my home after I had a pipe that burst and I had some flooding. So, I had to remodel my place. And I'm like, ah, I'm going to run Ethernet everywhere. Might as well put cameras that are on POE so they're always powered. And so, I put a camera from what is now one of our competitors. And it was, you know, to my mind, it was going to be a coolest thing. It was much more expensive than the nest and the ring. And then I have it and it's like, wait a minute. Now I have a Windows server on a rack that I have to manage. I can't access it on the go on the phone. Like, it actually kind of sucks. You know, it wasn't a great experience. And then my co-founder Hans hid at his previous company an experience where they had gotten one of their offices rubbed and they had a commercial camera system. And they literally couldn't pull the footage or the camera's footage was missing. So, you know, it was kind of top of mind from those two stories. And so, you combine that with the fact that, you know, the consumer solutions are getting cheaper, awesome, and better, and seemingly all that's coming from software. And so, those two things drove us to start, you know, researching the market, going to security conferences, calling anyone who would pick up the phone and asking them, hey, so what do you use for your security system? How does it work? What do you like about it? Yeah. You know, all the way to like pulling market reports and market studies, right? So, through the process of, you know, kind of a couple of weeks of these types of conversations, we, you know, we had this realization that the market for physical security is massive, right? Like, video security alone was a back then a $16 billion per year global spend category. And is that mostly people paying for cameras that they would install? Yeah, it's like the cameras, the video recording systems, you know, some services around it. But, you know, that universe, the world spends $16 billion every year, right? A lot of it is frankly actually replacement of cameras in the world, right? So, cameras break on certain cycle. If you add up all the buildings in the world, you know, about a fifth or sixth of cameras in the world get replaced every year, right? So, it's a five to seven year life cycle for these devices, typically. And so, that's that $16 billion spend category. And so, now you're sitting in my living room with my three co-founders and you're like, ah, the world seems to spend $16 billion a year. That seems like a lot of money compared to the zero that we have right now, you know? There's an opportunity there, yeah. You know, the consumer devices are really cool. So, it's totally doable. Like, we're not inventing something that, you know, is maybe impossible to build. Yeah. Oh, and you look at, you know, kind of what exists in the market as far as competitors. You're like, hmm, like we think we can do this, right? And so, that's kind of how Veracada started. And, you know, I think the emphasis and focus was really on, you know, how do you quickly build the software that differentiates the solution? And that's kind of how we get going. And then, how did you kind of just experiment and iterate with that first product? 'Cause it's hardware. I mean, that's kind of most, I think that's why, that's probably another reason why investors were like, you know, not for me, right? Like, I don't invest in hardware. A lot of founders say, I mean, I think today, actually, I feel like the narratives change a little bit. But 2016, hardware's hard. Like, if the word hard is in there, how did you go from coming up with this idea to experimenting with it? And actually, like, having products that kind of worked. Like, what was your process for doing that? - Right, so it was the first time I had built hardware of any kind. And so, you know, that part was tricky for me to overcome. And actually, Hans, my co-founder was, you know, it was great, his experience building Miraki, you know, which was a hardware software company, was fantastic here, right? Because he's gone through the journey. He knew how that happens. And, you know, frankly, he demystified it for me, right? So, that gave, you know, sort of comfort to me and the rest of my early team that we could do it. What was interesting to me was, you know, I'd always imagine that with hardware, you have to be very thoughtful and the cycles are slow and some of that is true. - There's big cat-x investment. - There's a big gap, I think, right? And, but, you know, I think very quickly, we realized that actually, you can iterate very quickly on hardware. And I think that probably wasn't true 15 or 20 years ago, but in 2016, it, you know, truly was very quickly, like you could get, you know, boards of the shelves, like, you know, we used Raspberry Pi's, you know, to build the first prototypes on. And you could actually move pretty quickly. So that was a very positive, pleasant surprise. And to give you a data point, you know, we built, we work with, you know, kind of join design manufacturers in Asia to build our stuff. At the beginning, it was in Taiwan and, you know, later now it's Taiwan, Vietnam, Thailand. But, you know, our first two cameras, you know, from, it doesn't exist to it's in a box that has a Veracada logo that has our basic industrial design. That took a year to build. And I think the total expense on tooling for those two first models was like $120,000. So it's not like this insurmountable amount of money or project. It actually turned out like, well, if, you know, if the hardware you're building is, you know, not so complex, like you're not inventing an Apple watch. Like that, that is hard to do. Like there's, you know, crazy constraints, power, whatever, you're inventing a lot of new components. In our case, we're, you know, we're essentially building from components that exist there, right? We're choosing the right sensor. We're choosing the right optics. We're choosing the right microprocessor. We're having someone assemble that in a thoughtful way. That turns out you can iterate pretty quickly on and that proved to be true, you know, for many of the products that we built over time. Yeah. And when you, when you say it took you about a year and 120K, that's comparable with just the software categories of the day, like took us here to build it. And we spent X amount on the salaries and engineering team designer, like, yeah, yeah. I mean, I think it, you know, it was the expense on the tooling and the initial builds of the hardware was not this proportional to any other company expenses if that makes sense. And that worked well for us, yeah. - So you have this notion of a customer therapy, customer obsession. Maybe that gets into like another phase of this conversation of just like, how did you understand what the customers wanted? Like, what was that process? - I think for me, you know, big way of understanding of how customers use the devices is just being a customer of our own product myself. So that's like one of the things I do obsessively. I use Vercada in my home and our office all the time. Actually, it's funny. Internally, we look at metrics of who uses Vercada the most. And I'm on the leader board of the employees using Vercada. - Oh, nice. - And you know, by quite a big margin to the next user. - Really, okay. - So yeah, I clock in something like over, I think it's over a thousand minutes of Vercada use per month, which is pretty awesome. I mean, I pull it up on my phone all the time. - Yeah, we use got like five more minutes. - Yeah, you've got five more minutes during the demo, but I think you're using it obsessively and caring about the details. It's part of my DNA, I love doing that. You mentioned what I jokingly call customer therapy. So we joke that whenever things go sideways, which something always goes sideways, you have COVID, you have the supply chain crisis. Who knows what's gonna happen in the world. We love talking to our customers. We talk to our customers and they emphasize how we've solved this or that problem and every customer tells you something slightly different. And it's just awesome. It gives us energy, it makes us go, you know, kind of work harder, build more. And so that's this concept of customer therapy, which we talk about, which is they just give us the energy. Like when things go sideways, if you call, pick a random and call one of our customers, you know, sure, they will always mention one or two bugs. That's great, actually, 'cause that's awesome feedback. Yeah. But overwhelmingly, they're like, man, like you've really moved the needle forward. It's awesome and, you know, we're so excited to be using Vercada and like great. It's like that is the best possible motivation to keep going and keep building stuff. So you had, took you about a year to get the first product that you said with the Vercada logo on the box. You're shipping into someone. How did you get the first customer? Like what was that sales process like? Like, and what was maybe the market like at the time? We may be alluded to a little bit, but like, how did you like slot in and convince somebody to use it? Yeah, so it was, it was hard, honestly. At the beginning, you know, I remember we, we actually we launched our product and, you know, we didn't have any product marketing yet. If you went to Vercada.com, it literally said we're building something cool. It was like a placeholder, it was like a square space, you know, a type of, you know. So it didn't even say cameras or security. We're building something cool. Like, you know, who are you? And then maybe you had like a link to our LinkedIn or bios or whatever. Yeah. And we hired our first two, two salespeople and, you know, they're like calling people and telling them, you know, about cameras and security and, you know, invariably everyone comes to our website and it's like, are you a real company? Yeah, you think it's like a scam? Yeah, this is almost right. And, and, and, and, you know, what was interesting is for the first few weeks, probably first few months, those conversations were really hard. Because like, you don't know what to say. You don't know how to pitch it. You don't know how to position it. But, you know, you quickly start realizing that there is a very large commonality of problems that people face with their security systems, which happen to be, you know, the same kind of problems we set out to solve with our product. And, you know, when you start talking articulately about those problems, folks are like, you know, the light bulbs start going off and they're like, oh, maybe I will take a risk. Maybe can you send me a trial, right? And, and so the next big thing and it's true to this day for us became, you know, let's get our product into the customer hands as fast as possible, right? Even in our conversation today, you know, 40 seconds into it, I pulled out my phone and I'm showing you how the system works. Same directive for our wholesale steam. Like, if you get on the call of the customer, like maybe ask them about their use case and then flip to the demo, right? Like, show them how the system works. Show them what it's capable of. And that's what gets people excited. And from there, you know, typically goes, you know, sort of demo trial unit will send someone or two cameras, they might put it in their office, they might put there in their home, doesn't matter. As long as it's plugged in, it's a huge buying sign for us because invariably, they'll like the technology and they'll start thinking of cool things that they can do with it, right? And so that's kind of how the sales journey goes for us. - That makes sense. And we kind of alluded a little bit earlier that fundraising was not the easiest in the early days. - Yeah, in the early days it was really hard. - Yeah, so how did that go? Because from what you described, I know, we didn't even talk about this, but one of your co-founders, Hans, he was the co-founder of Meraki, which was acquired by Cisco, was it in the '90s? Like the late '90s? - Oh, in 2012 maybe? - Yeah. - Just a couple of years prior. I think 2012, I read around then. - He was fresh off, and that's it. - Yeah, he was, you know, he sort of, yeah, they sold the company. They've been there for a few years and he was looking, okay, what is he going to do next? - Yeah, so on paper, you guys seemed like pretty stacked team, I feel like. - Oh, yeah, we felt good. And we felt like we, you know, we found a good idea. And in fact, we were so bullish on it that initially we put some of our own money into the business and we thought maybe we can skip the seed round, go straight for an A round. And then, you know, we proverbially got our butts kicked when we started raising money. - Mm-hmm. - And, you know, what was going to be a Series A became a Series C, then even that was a hard process. And I think, you know, the challenge people had was, you know, one, they looked at this market and they're like, this is a boring market, which is sort of the comment you made earlier. Like, people weren't talking about physical security in 2016, like, we were talking about self-driving cars and virtual reality and-- - We have a hard thing. - We have a hard thing. - And SaaS that and Philip, why aren't you building a SaaS whatever software for HR or whatever, like, name your topic. Like, Philip, we should build some other SaaS thing for something, right? - Yeah, you were in like the, in an un-sexy market and you were still in the era of, like, hardware is just like, our do not touch. - Oh, yeah, yeah. - Like, it's not automatic, we're not gonna invest. - People are allergic to it, right? And it was, you know, so that was a problem. I think the next problem was, you know, there's been a sort of a graveyard of startups within the video security space. We've tried to build a, you know, some kind of, like, retail analytics products where, like, I'm gonna count people coming into your store and give you some data. And while, you know, I think many of them were actually good ideas, what we realized is that, you know, a lot of the buyers, the budget they have is for physical security. And so these retail analytics type use cases, while they're demanded in the market, they're sort of the nice two halves. It's not the bulk of the expense category, right? So we had the pitch of, like, ah, we're actually, we're gonna go to the customer, we're gonna offer them the physical security solution, which, by the way, they need. And here's the proof that, you know, the world spent $16 billion a year on that stuff. And of course, we'll layer all the analytics, you know, sort of on top of the platform. But folks looked at it and they were like, yeah, this is not that exciting. It's high risk to your point. It's, you know, it had a hard work component, even though I think, you know, the majority of the differentiation is truly in the software. So yeah, it was a brutal fundraise. I'm an optimist. I think you have to be an optimist as a founder. Yeah. So I joke, I'm a glass half full or two thirds, like whatever, like the world is, yeah. I'm optimistic, I'm positive. I, you know, I believe in the good things will happen to people who work hard and so on. So, you know, I remembered this very dearly, right? We were, I think, maybe 10 or 11 employees by the time that we had, you know, put in some of our money and moved into a tiny office in San Mateo. And every day I would go to, you know, San Hill Road, go to a meeting or two. And I would come back from the meeting and I'd be, you know, like, oh, it was great, you know, like everything was good and, you know, invariably every one of those days my team would look at me 15 minutes later and they're like, yeah, so do we have a term sheet? It's like, no, we don't have a term sheet. I got a nice water bottle, but no term sheet. I mean, we had jokes about it. We had like, which VC has the nicest water? Because you know, that's literally all I came back from. They give you like an AirPods case. Yeah, I get it. Yeah, exactly. It's just like a polite way of saying, yeah. Not, I think what it was astounding to me for, you know, two, three months was like, it wasn't just like, hey, Philip, this is idea is not so good. So here's a term sheet and it's not such a good term sheet, but, you know, there's a deal to be had. It was like, this idea is so bad that we're like, not even going to consider giving you any money. Yeah, like we're not even trying to get like a just low ball. You like we don't want anything to do of it. Because it's just this gross, weird market that we're not used to and, you know, it's an outlier. So we navigated that, you know, that was a, you know, sort of a definitely a crucial existential moment for the company where, you know, we literally almost went out of money. Well, so then how did you get someone to actually give you money? Like was there a certain moment or like a change to the pitch? Yes, there was a couple of things and I think, you know, the tide's definitely turned for us pretty quickly thereafter. But, but the, you know, the couple of things I'll share there is initially, we had to, we turned into our friends. So we're like, yeah, well, the professionals told us no. And so let's look at our friends and see if someone will fund the company. So that's how we survived that moment in time. And then, you know, I think we, you know, kind of realized, okay, like we have to sort of make the pitch better. And some of that was on me. I was very excited that I built a camera and I had some hardware in boxes. I would bring my camera to a VC meeting. Like don't do that. Oh, you know, don't do it. Really, yeah, like pull up the dashboard, show the software. Okay. That's a much better way to start the conversation than like putting a box with a camera on the table, which, you know, frankly, look like every other camera in the world. Yeah. Frame it as the hardware, not as the software. And I think that's actually the key is, is how do you frame the conversation, right? And even though, you know, probably nine out of the ten slides in my deck were software and computer vision and all of that good stuff, you know, people looked at us and they're like, ah, this is just a boring commodity hardware company. But then it turned around, right? And I think the way it turned around, which was fantastic, was, you know, we started, we brought the product to market, the demand from the market after the first few months of figuring out the sales pitch, like sort of went as textbook, as beautiful as you could imagine, right? So, you know, $1,000 deal, $5,000 deal, $10,000 deal, $50,000 deal, you know, I think three, four months into it, we're on a Zoom call with a customer. And they're like, yeah, we need a thousand cameras and that's going to be like $950,000. I'm like, wow. Well, I only have two 15 in my garage, but we're going to crank up. Did you got the customer that, you're like, you know, we had to work it out. I mean, we fortunately, we, you know, we had the capability of increasing our order size and, you know, had the flexibility. So we're actually able to, you know, fulfill that order and that customer is a customer to this day. It's a school district in Arizona. But it was just, you know, kind of this awesome inflection point. And of course, that then turned the tides of fundraising and we, you know, became a company that was on the radar of many people. And so then we had a, you know, very good series A series B series C, we, you know, we had Sequoia, Meritech, like very well known folks joined the journey. And that definitely, you know, that definitely gave us validation, you know, some comfort that, okay, actually the idea wasn't so terrible. But that actually where it really mattered and this is, you know, kind of, this was, you know, maybe obvious and hindsight, but not obvious to me at the time. Being that validation was very important, not just for us internally, but for hiring, right. So, you know, if you're a startup and you're doing well, your biggest limiting factor is how quickly can you bring comfort and people, train them up and help them, you know, sort of drive your mission. Yeah. And so that, you know, sort of series A series B quick validation series C, you know, that journey really helped us, you know, access a much broader pool of excellent talent in the market, which was necessary to then take this company through the, you know, kind of crazy growth, which occurred over the next few years. Yeah. Because when someone's looking at joining us startup, just at a very high level, I feel like the, you know, kind of like that, I don't stigmo or like the meme around startups for the average person is, oh, it's risky, right? Oh, 100%. And if you're, you know, let's say your parents immigrated and they brought you to the US and you got into a good school and they're like, go become a lawyer or a doctor or a good job, work at, you know, management consulting or big tech versus a startup. It's like that can actually be really hard to not just the individual, but also the people around them to say, are you sure you want to work at this risky company? So that's what I think actually, you know, probably if you looked at it statistically, joining a startup as an early employee, probably on average is like a wrong decision, right? Because many of them fail and, you know, you're not going to get paid well. And so you have to love it for, you know, the journey, the work, the learning, something else, like financially, you know, probably on average, it doesn't work out, right? Or the typical story doesn't work out. So it's sort of, you know, I think it's rational that, you know, sort of getting external validation, getting more funding, you know, is what then gives you access to a, to better kind of hiring and labor market. Is there anything that you've found works well, maybe advice, advice for other founders, but then maybe this is like a pitch to somebody that's listening to this. Like considering working at Fricata, but what do you say a lot of the times to just convince people like, hey, Fricata is the right place or Fricata is a good opportunity? Well, I mean, I think it's evolved certainly and changed over time, right? But how's it evolved, like early days and then all the way to today? Yeah, yeah. I mean, look, I think the unifying theme, which I talked to everyone about is just join a place that grows quickly. And I think the reason for it is not just financial, I think the reason for it is if you join a company that, you know, kind of grows in compounds quickly, the growth of that company will most likely outpace your personal growth, which is a good thing because it's just going to drag you forward in life, right? Like the company will throw harder problems at you. You will have less support to solve those problems. You're going to have to do more work. You're going to have to work harder. You're going to, like your brain is, you know, just like any other part of your body. Like if you exercise it, it gets better. If it's stagnant and your job is easy, like it atrophies, right? So, so that's what, you know, I think, and it's, I like telling these two people because it's also a, it's a great selection criteria in a sense, right? Like, there's folks that this is compatible with their lifestyle and there's folks for whom it's not compatible and that's totally fine. But I think if you are, you know, sort of joining a early stage company or a high growth company, one of the benefits you're getting is sort of the learning and the crazy experiences you will get access to. And so I think that is a, you know, kind of a must discuss hiring criteria and it also, you know, sort of offers that perspective to the candidate. So I think, one thing I think you've done a really good job at, I believe you said there's kind of five major product lines at this point. The six, six product categories. Six, six, six. Yeah, yeah, yeah. It's hard to keep track of. And I know all the ones that we haven't released. Oh, really? Okay. Okay, number is fluid in my head. I think like how big are you going to get eventually like 50, 20, hundreds? How are you thinking about that? You know, I think, let me give you the theory behind it, behind the madness. And then, you know, I think it'll, it'll, it'll maybe make sense, right? So we started the conversations by talking about the $16 billion video security enterprise videos or commercial video security market. Yeah. You know, I think to give you a good intuition about Verkada and the markets we serve, right? We build products that protect physical places, right? Buildings, parking lots, you know, that kind of stuff. And so, you know, I think a good proxy for how much Verkada does the world need is the number of buildings in the world, right? So where there's buildings, there's a need for Verkada. And generally we think where there's GDP, there are buildings, and then how fast do buildings appear in the world? Well, sort of approximately at the rate of GDP. And so why am I sharing this? Well, if you sort of deduce from that, you know, the number of buildings grows with GDP, the ultimate growth rate of those markets is not that fast. So $16 billion felt like a lot when we were in my living room and we had $0 billion. Yeah. You know, now we're selling high hundreds of million per year. You know, I think it's very easy for me to see, however, the next couple of years, if we were just in video security, we're now a meaningful part of that market. And hey, I want to keep growing the company at 30, 40% a year. That's what makes the business exciting. You know, the number of buildings in the world and the size of that market is just not growing fast enough to sustain that for the next decade, let's say, right? And so, you know, therefore, like one of our strategies in the way we think about the long-term is, okay, we have to create more opportunities of things we can bring to the world and hence our adjacent product categories, right? So we went from cameras to access control to air quality sensors to alarm systems so on. And each of these ads, you know, yet another market and yet another category that we can sell to, you know, today, the six products that we have addressed about a $55, maybe $60 billion per year spend. And you know, the way we think about the company is as time goes on, we'll add more categories, we'll bring all of these systems into a unified single pane of glass software experience. That's by the way what the customer wants and dreams of. And you know, that's kind of how we're thinking about maintaining the growth of the overall business for years to come. Yeah, because when you say, you know, GDP of buildings, it's like anything on a building you could sell to the owner of being like, you kind of have these customer channels that are already built. Right. And security, the camera security, they're buying access to like get into the building, they're paying for controlling window shades or like intercom air conditioning units, like anything that makes the building, I think there was a soft bank company that did us back. And I don't know if it exists anymore, but it was like smart window pains. Do you remember this company? I don't remember it, but okay, I'm sure like every variant of smart building tech existed at some point. Yeah. It was actually a fascinating company. The tech was like it was like a smart window company and the tam was a trillion dollars because every building has windows and you can control the window, but it's actually in the context of maybe it's like fully developed company and product. It's like, can you sell windows that actually have better technology or something? It's an interesting, interesting place to go. I think the way we think about it is, you know, think about, you know, all the infrastructure that maybe hasn't been modernized. And you know, for us focused around physical security that's certainly the initial focus. But you know, if you think about, you know, video security, if you think about access control, if you think about alarms, those are three great examples of things we do. You know, shockingly it's, you know, from 2016 and even today in 2025, most of those systems are on prem. They're not remotely manageable, they're hard to manage at scale. There isn't a provider in the world, you know, that unifies all of them seamlessly. There isn't a provider in the world that can deliver a unified solution to a company that's a multinational around the globe, right? And so we see that as an opportunity, right? We put these systems together. I think we have no doubt in our mind that the customer has the desire of all of these things working seamlessly together, working well. And then, you know, of course, we can do it globally anywhere. So those are like core advantages to I think our solution versus what's out there. How have you decided what new products add at what time? Like is there a good way to think about that? If I'm running a company, I'm like, okay, I got this one product works really well. A bunch of places I should go. I think you guys did access controls for the buildings. Second, maybe explain that product and just how you thought about how you should go about adding a new one. So look, I mean, I think how you should go about it or whether you should even go about it. I think it very much depends on the category you're in, right? So again, we, you know, I think for us, it makes sense because it adds additional markets and it allows us to grow for many years, you know, arguably if you are a single product company in a giant market, like, you know, don't distract yourself from that, right? So maybe that's the first question to answer. You know, why and how we thought about it at the time was we were pulled by our customers into it, right? We were, you know, building cameras and the customers were loving that product and, you know, I think even more importantly, loving the command platform, which we were, you know, sort of offering them in software with it. And they wanted to tie our system to their access control and other parts of their building frankly. And so, you know, that, you know, sort of customer demand pulled us into access control and that we said, oh, okay, cool. You know, first, maybe let's try to integrate with what you have. And then very quickly, we realized that, you know, the existing access control solution suffered from some of the same problems that we discovered in the video security space. And so that's where we, you know, started thinking, oh, maybe, you know, maybe we should actually build a first party solution for access control, which is, you know, the system that opens doors and scans badges. And that was the beginning of that platform strategy for work out, right? So we started working on this product around the time I was raising the series B and then quickly thereafter, the series C. And so I, you know, began experimenting with telling the story of Vercadas, not just a video security company, we're going to build the platform or operating system for the physical space, you know, all of these devices will be tied together with software and AI and that will create, you know, kind of better results. So that's kind of how we, you know, got dragged into it. And, you know, fast forward to today, like, certainly we've realized that vision. So a couple of cool things I'll share with you, more than 70% of my customer base uses two or more of our product solutions. That's good. You were at 60%. Not that long ago. Yeah, not that long ago. Yeah. So we keep chasing this metric, right? So we, we look at, yeah, the number of customers who use two or more products and that's a key metric. And actually, if you look at three or more, four or more, even some that use six, you know, all of those charts are kind of following really nicely, which is, which is cool. That's got to be the holy grail as you get a customer and you expanded using all, all the product suite. Like that's got to be 100%. Right? And it's so awesome for the customer because now they have kind of complete visibility and the best control over their space and building. Yeah. And it, you know, it really drives, you know, kind of meaningful outcomes in the world. So like to give you an example, we work with a community college here in the Bay Area Actions, San Jose, so they deployed Vercada cameras and access control and lockdowns. Like literally, like if there is a, you know, situation, you need to lock down a building, the procedure to make a lockdown happen used to take on the order of like 30 minutes. Oh, wow. Why? Well, because you needed to check this, check that. Then you need, you know, maybe you have disparate access control system. Multiple people have to command them. And so we've reduced that to, you know, single digit minutes, which is amazing because now you can, you know, very quickly react to a situation that's unfolding. And you know, certainly, you know, kind of prevent, you know, certain types of activities or people getting, you know, into dangerous situations, right? So, so I think it's, you know, both the dream of the customer for these systems to integrate together. But then also, you know, in those cases where we do integrate them together, the outcomes and the use cases are super awesome, and it's really cool to see it all, you know, sort of interplaying. And I think that's a, you know, if I think forward about Vercada for the next, you know, five, seven years, like, I'm excited about, you know, adding new adjacencies, new product categories. So, like, that's definitely one area I spend time, you know, the power of computer vision AI, all of that functionality just, I mean, it's definitely crossing this level where, you know, it's now real, it's driving real use cases. It's very accurate and it's going to be, you know, super powerful. And then last but not least, you know, you tie all of these things together, they seamlessly work together. And, you know, that's what drives these awesome outcomes and the use cases. Yeah, because I just go back to the demo that you showed where I could probably search if I was looking for, you know, certain event happen and need to bring up a certain piece of the footage. And, you know, I've just heard it, like, you think about using a VCR with tapes and it's, like, we need to go to this specific moment and find this one thing. You've got, you physically have to fast forward and watch and, yeah, maybe in some cases, you can't fast forward because it's such a small detail versus with software, you can literally say, specific thing, use the LLAMS that will search for it, pull it out and, like, here's a specific moment in the two hours of footage and you got it in five seconds. Yeah, and I think, look, we're at the point where I think actually, in many cases, you know, computers are much better at certain detections. So, like, if you played you a video feed and actually, I think I showed you one in the demo where the person was just tiny in the distance, like, as a human, you might not notice that, but the computer will detect that. So, I think, you know, I think we're right at the border of computers are better at spotting people and vehicles in a video feed than an ordinary human, which is cool, particularly because that task is also, like, very tedious, right? Like, you don't want your security personnel to necessarily be just sitting there and watching a video and nothing's happening in the video, you know, they can be more efficient. They can be more useful. They can be going to address, you know, situations around the building. So, that's kind of the idea of a lot of what we're doing. Yeah. And then, who is the actual, like, the customer, the person that's buying this? Is it somebody who is at, like, the facilities manager or. So, it varies. There's different personas of customers that buy our product. I would say that because the systems that we sell ultimately are connected to the internet and live on the network, in most cases, IT is involved in some capacity, right? Because it's now a widget on the network that they have to manage. In some cases, IT is actually the buyer. And in some cases, it's more traditional, like, a facilities buyer, you know, think of a, even, you know, in retail, for example, it's lost prevention, right? So, there's a specific role that's focused on things like shrinkage, like, how much product are we losing? Yeah. And so, you know, there will be a dedicated function to that. So, there's, you know, sort of a handful of personas, I think, you know, to give you the, like, the high-level advantages, if you're an IT buyer, you know, you really like Verkata because it's simple. It looks and behaves like any other modern IT widget you have. You can manage it at scale. It's, you know, kind of easy to configure and navigate through the cloud. You know, if you're one of the operators of the system, or a physical security, you know, personnel, guard, loss prevention type of person, the simplicity and use, you know, of use and the usability of the product really comes in handy, right? Because, you know, these folks have a lot to do, and again, it's a stressful job. And we just provide a tool that lets them do their job better, right? So, they, they, they fall in love with the solution quickly. Yeah, was there a pushback at all, initially, back in 2016-17 with, like, the cloud, like, using smarter products? Yeah, absolutely. I mean, so look, we, um, well, I was actually astounded by it, right? Because if you think about it in 2016, like, what isn't in the cloud? Like, literally, most software is cloud-based, and that transition sort of happened the decade earlier. So, I think, you know, for us, it was a little bit shocking that so much of the physical security infrastructure lived on premise, and we didn't quite understand why. Did you want, did you end up understanding why? Well, I think the, the best answer I have is, I think, you know, our competitors and folks in this space, they evolved this hardware companies. So fundamentally, their DNA was hardware, and they got very good at it, right? They built more models of cameras, and, you know, you can buy, you know, anything from HD to 4K, 8K, bomb-proof, gas-proof, leak-proof underwater, like, you name it, it exists, right? Like anti-ligature, so they, they build this, like, fantastic portfolio of hardware solutions to the problems they were solving. But I think their businesses, over the past couple of decades, they evolved around that capability, right? So they got really good at that. They're like, they're like pre-internet almost. They're built in the, well, I mean, maybe you can actually say that because, you know, I think a lot of it was actually, you know, back in the day called CCTV, right? Close-circuit television, it was on its own network, you know, I don't think it's maybe fully fair in that. I'm being a little critical, I can say it, you can't say it. Yeah, I, you know, I think largely, like, I actually admire a lot of what our competitors did, right? Like, their hardware is pretty good. Yeah. And, you know, I think if your DNA as a company for 20 or 30 years was getting better and better at hardware, it's hard to take that ship and turn it and now say, hey, I'm going to build beautiful consumer-level design software with simplicity in mind that works on the go. Yeah. Oh, and it leverages, like, literally the latest AI advances, like, it's hard to take that team and shift into that gear. Yeah. And I think, you know, to really make, you know, initially a video security and then more of the broader industry cloud-based, it required a pretty deep re-architecture of the system. So, I think a lot of people tried to say, oh, like, everyone's moving to the cloud yet. We have the cloud too. And so, they put it in their marketing materials and they built a, you know, a fairly simplified or maybe naive implementation of that. And I think the result was, it just didn't work well for the customer, right? And we, you know, had the benefit of starting from a blank piece of paper, right? We were starting the company in 2016. So we could really, from the ground up, think of what it means to build a cloud-native product, cloud-native camera, like, how is it going to start a video? How is it going to manage bandwidth? How do you deal with, you know, a thousand cameras in a rural location with a limited connectivity or a Starlink connection, right? We do all of that. The reason we can do it is we designed for it from day one. And I think that became a big differentiation. You know, interestingly, and this is cool, one of the things I'm proud of eight years later, we're now the leader in cloud-video security, right? So, if you look at market share of cloud-video security, Verkada has, I think, 30, 30 some percent of cloud-video security, and we're trying to do the same to, you know, kind of the broader physical security market. Let's just take these things, make them cloud-manage, power them with modern software, power it with, you know, AI and the latest advances, and, you know, give customers the benefit of the super-rapid iteration, like, that's, you know, that's kind of the recipe. I feel like there's analogies today with, you know, AI-native companies, or like somebody who has legacy, you know, software, maybe legacy's not a fair word, but more mature software. And like, oh, we were slapping a chat GPT search feature, or we're putting an agent, an AI agent in it, or like a chatbot, or something. Yeah, I think, look, there's a lot of product out there where they're trying to, you know, put cloud on top of it, that was 10 years ago, and now they're trying to put AI on top of it. I think, you know, we're trying to be thoughtful about all of these changes in technology and build it in in a native way where it actually serves a real use case and a valuable way to the customer, as opposed to just being sort of a buzzword or demo candy. Yeah. Well, we're some of the biggest challenges, as you started scaling, I think you've described it as different areas of the company from like 20 to 200 employees, 200 to 2000 employees. What are some of the big things that stand out as like biggest challenges you had to overcome? Sure. So, I mean, look, I think when you're a startup and you're 20 or 30 people, effectively what happens, at least that's what happened in our case, you know, everybody thinks your idea is crazy and bad and maybe you won't work. And so, effectively, the people who work for you are, you know, acquaintances, friends, people you've worked with before. So, there's like an inherent level of trust and connectivity among the initial team. And probably both beef and beef. Yeah, and everyone's like bought into the risk and, you know, they know what they're signing up for. And that's cool and very valuable and that you can move very fast and you don't have to, you know, have very much like management overhead or, you know, like when we were 20 people, like we didn't need to have an all-hands meeting. Like everyone knew the full state of the company all the time at all times. Yeah. You're just all sitting in the same spot. We were all sitting in a room that was, you know, the size of the. You were in your house for a while. Yeah. You were in my house for a while. Like we cooked meals together, like, you know, it's like, you just 24/7 together and everyone understands what's going on. So, I think that was one of the big shifts which, I mean, frankly, I screwed it up a little bit as we went from 20 to 200 people and I had to adjust how I work and how I work with the team, right? What were the biggest mistakes? Well, you know, I think the big mistake was you extrapolate the assumption that the team knows you. Right? Well, they all know you. Like, Philip is a good person, you know, whatever is my background, like, you have enough context about me that, you know, you sort of have some inherent trust. Like, if he says something, I know what he means by it versus. Yeah, that. It might be taken a wrong way if you don't know him that well. Right. Exactly. That's a great example or, you know, or how do I think about making decisions or what is the mission of the company or what matters to the company and is. I don't know, is privacy important, is it not important? Yeah. Things like that, right? So, all of these are, I think in the early days, everybody gets it and everybody knows. And then once you pass, you know, something like 150 to 100 employees, I think it takes a concert at effort to make sure that the next person who joins the company understands what, you know, the founding team or the founders or me, you know, in my role, what we stand for, right? And so, I think, you know, the mistake at the time was, like, I just didn't invest enough time in activities that would help the broader team, you know, understand who we are, what we do, how we do, what's okay, what's not okay, so on and so forth. And, yeah, it's not hard to solve. It was a matter of, you know, really paying attention to quality of all hands meetings, like doing them on a regular basis, doing Q&As with the team, doing. I do a lot of skip-level lunches. I do this to this day, right? I'll get together with a group of four, five, six employees, you know, that I otherwise might not interact with very often, but, you know, you hang out for an hour or two, and now they sort of understand my mindset. And if someone else asks them the question about, oh, like, why did Vercado decide XYZ, you know, they might at least have some context of, like, oh, you know, Phillips said this is how they think about it. And so, that propagates, you know, sort of messaging and unifies the mission of the company with the broader team, right? So, it's not just like, hey, come up with a mission statement, put it on a slide, I mean, we have that, and everyone, you know, understands it, but it's like, how do you put it into action with people is really important? Yeah. And then, so that sounds like big initial kind of 20 to 200, anything from 200 to 2000? Well, you know, there, I think it becomes a, you know, a big challenge of how do you actually bring and train and successfully onboard that vast amount of people over what feels like a pretty narrow window of time, right? And I'm assuming you're probably hiring at least one person a day, or close to that, or more maybe. More, right? I mean, yeah. So, so one of the things I do to actually be connected with the team, I, I onboard all new employees. So, every, so what do I mean? Every two weeks to, every four weeks, we'll have a new onboarding class. All of our global employees from any of our offices, I think we have 17 offices around the world. So, everyone flies into HQ for onboarding. I do one of the onboarding sessions, you know, a little presentation about the company, the UNA, sort of meet and greet the new, you know, the new, the new starting class. And look, I mean, now we have starting classes that might be 50, 60, 100 people in one go, right? So, that's a big, you know, that's a big group of people. And our job, which I think, you know, again, this is later on as the company got bigger. We had to invest in these systems. Our job is to make sure that these 100 people who joined, you know, I don't know, last Monday, become successful at the maximum possible rates and in the shortest amount of time, right? And that is a, you know, actually a big challenge in itself, right? Hiring the number of people is pretty tricky and, you know, I think, you know, when you're going 20 to 200, I think, you know, pretty much doesn't matter where you are in the world, like most normal labor markets are big enough to support that, you know, when we started going 300, 400, 500, you know, so on, we found it hard to find the sheer number of people in like one location that we could hire. And in the Bay Area, especially the, you know, the labor market is extremely competitive, right? And so, that actually led to one of our, you know, next decisions, which was to open offices outside of the Bay Area. And, you know, I think today you might look at that and you might say, oh, that made total sense because you put salespeople closer to your customers. And yes, that is true. But the other factor, which was really important to us and it was definitely a growth hack for us, was we could tap into new labor markets. We could, you know, divide the problem of hiring 100 people a month into like, well, HQ will hire 15 and Salt Lake City will hire 15 and, you know, Texas will hire 10, whatever the numbers are. And so all of a sudden, these problems that, you know, it felt like a, oh my gosh, how are we going to get 100 people here next month? Yeah. So you put the problem down and you divide and conquer and each office has their own unique culture and elements and they can attract the local calendar and that's become hugely advantageous to us. And you kind of have a little bit of a decentralized org structure in the sense of the, an individual office might have a recruiter or maybe I'm not quite saying that, right? But how do you do that? Yeah. So, look, we believe that decentralization is definitely a theme for us. I joke that, you know, Stalin and Soviet Russia proved that central planning doesn't work. So, you know, we believe in decentralizing, right? And then what that means, you know, I'll give you some concrete examples. Like, for example, for recruiting, you know, many companies will have one central recruiting function for everyone in the building. And that's fine. There's like, efficiencies that can come from that. You know, in our case, we decided, you know, each function has their own recruiting function. So my sales leader has a completely disparate recruiting team from my engineering leader, right? And, you know, what that leads to, which is pretty cool as an outcome is, you know, you get, you just get completely different practices. You realize that, you know, in the Bay Area, maybe, you know, for salespeople, you're going to host happy hours in the Marina and that's a, you know, kind of an effective recruiting tactic. You know, for engineers, it might be something completely different, right? Like a hackathon or something. Like a hackathon or, you know, some visit to the office or tech talk or whatever. And so, you know, what's really cool is by decentralizing, like, two things have happened. One, you know, the teams evolved to their own needs. And they specialized in their own jobs, which is cool. They have more autonomy. They don't have to worry about each other's responsibilities. And from my perspective, you know, you know, sort of leading the company, the reason I like it is, you know, now people can't point fingers at one another. Like my engineering, you know, my CTO, can't say, oh, we missed hiring because, you know, the CRO needed the recruiters to hire all the salespeople now. It's like, you know, hiring is equally important for engineering as it is for sales. And by splitting those functions, everyone can sort of chase their own independent goals and nothing gets in their way, which, you know, I think, again, for folks who are motivated and ambitious. I mean, it's actually, like, fantastic for the people doing the job, right? Because it's focused. It's undistracted. The metric is clear. The goal is clear. They know what to do. They get it done. And then they feel great. So then how did you decide one to do that? Because I could take what you just said and think, okay, so my sit, like, I might be a 20 person company. I might have a sales guy, a marketing per guy, like PR team, like an engineer. I might say, okay, I need to hire five recruiters or I need to hire all, like, how did you decide when you need to start to kind of, you know, decentralizing the team? Well, that particular decision I think was very early. So I think it was actually around probably 30 people, maybe 50 people. And I think, I mean, look, when you're 30 or 50 people, the core team is doing a lot of the work, right? So I was doing a lot, I mean, I still do recruiting, right? My CTO was doing recruiting, my initial sales reps were doing recruiting. But, you know, at some point, you know, kind of in the tens of employees, we realized that, you know, the engines for growth for our company are going to be one hour, keep a building to build amazing software. And so we must have a ability to attract great people and retain them and train them and, you know, make them good at what they do. And so that was sort of the mission with the CTO. And then two, you know, our sales, our revenue scales, linearly with the number of sales people we have. So, yeah, okay, great. We're going to grow an army from, you know, two to 10 to 30 to 50 to, you know, I think now we have on the order of 700 quota carrying reps around the world, right? So to build that army, you know, over the course of a couple of years, you're like, wait a minute. Like, if one recruiter can source, I don't know, call it three to five salespeople an average per quarter, you start adding the numbers up and you're like, wait a minute, I need an army of recruiters to be able to build my army of salespeople. Yeah. And by the way, that's very different than the challenge of hiring, you know, the best engineers in, you know, certain domains. Are there any tactics that you found work best for recruiting more efficiently or better or like mistakes that you've come across that you made? I'm sure we have, you know, I think, I mean, I'll give you a couple interesting ones. You know, I think within marketing at one point, we did a billboard campaign, which you can't attribute the dollars to, you know, like any customers you got from that. But at some point, we decided, ah, we're big enough we have enough budget. Let's put some billboards about what we do. That had a very nice halo effect for employees and for recruiting. I think we talked about the other one in the early days. Any sort of external validation that the company is good or doing something good is very valuable. So, you know, the sort of recognizable name brand investors that we got at the, you know, Series B, Series C, so on, like that was an, you know, sort of an inflection point in terms of recruiting. So those are some of the, you know, the kind of good things. Yeah. So then another thing on scaling, you mentioned that a big challenge was you had people that have been in the company for a very long time that had seen a lot of growth, been very, like, a very high amount of contribution to the team that actually you had to hire somebody over top of them. How, how should I approach that as somebody if I'm going into that situation? Well, look, I mean, I think it goes back to my, my prior statement that I think if you join a company that grows really fast, the growth of the company will most likely outpace the growth of any individual. And I, I include myself in that category. I'm like, there might be a day where I might not be the right person to do my job. That's totally fine. You know, I'm optimizing for the company in the long run. So I think, you know, for us, we accomplished us by, by being aware of that as individuals. And certainly everyone on my team is sort of aware of that. And being ego less about it, right? So, so, so I think that's a property that we look for in people we hire. And, and I think it matters. And look, I had great examples, you know, from the, like, beginning of the company, tiny, you know, five of us, whatever, seven of us early days, one of my co-founders, you know, he was the FACTO CTO, right? And, you know, seven months into it, we're like, realize that he's great at doing, you know, kind of coding and building and architecting solutions. And he doesn't really want to spend his days hiring. It's like, well, you know, the CTO's job, like hiring is pretty important, right? And so, like, he's still here. He's a, you know, kind of core architect of the system. He loves his job. You know, we brought in someone who's the CTO who's, you know, particularly good at, you know, some of these other skills. The other example, which, you know, I think is really cool. And someone who's scaled with the company for a long time is one of my very early sales reps, like probably sales rep number five or six in the company, scaled to run the whole organization from, you know, he was sales rep number five, called calling, closing deals to, you know, running, I think he got the team to maybe five hundred quarter carrying reps and doing, you know, hundreds of millions and more than a billion in lifetime bookings. So he scaled from, from that beginning, all the way to that role. And I think for probably a period of two years or maybe a year and a half, I was telling him like every other one or one, I'm like, I just want to remind you, there will be a time where, you know, I think we're going to need to bring someone who's seen how this story plays out at a certain scale. So we don't have to reinvent everything from the beginning. You know, and I think the cool thing is a few, transparently communicated about it, you know, and sort of, you know, position it correctly, you know, at least to good outcomes. Like, you know, that person is still of the company, he runs an awesome big part of the sales team, you know, we brought in a CRO and it just works out. And I think, you know, you should expect to do that, right? It's almost like if you're not thinking about who, you know, where you can upgrade or what, you know, new people to bring to the team, I think, you know, potentially you're leaving things on the table. Yeah, well, speaking about upgrading and speaking about like evolving as a leader or as a contributor, I know you talked about before when we were catching up, you said, you know, I was the introverted engineer. I don't know how to become a CEO, you know, multi-thousand person company. How did you do that? That's a good question. You know, look, I think there are certain things that I gravitate to, that I like doing naturally that have been helpful for me. Like fixing cameras. We had a live issue. He was like, Philip was literally in here, like fixing the cameras, making sure they still ran. Super fun. I mean, yeah, we had an overheat situation. Yeah, not our cameras. Yeah, not for hot cameras, but the cameras that are filming us. So look, I mean, I gravitate to product, I gravitate to engineering. I love doing that. I think no one's ever like, that's never going to change. Like, I will spend my evenings thinking about features and how to make stuff better. How I do that change dramatically, right? And so, you know, at the beginning, I literally wrote code and, you know, our first iOS app, you know, today, I have to think about, you know, with a team of 350 or so software engineers, how do I effectively spend my time in the areas that matter? How do I, you know, infuse, you know, ideas that I have to the broader team? And how do you do it in a way that, like, doesn't feel like I'm micromanaging, right? Because if you're, you know, highly talented software engineer, the last thing you want is a seemingly, like, oh, this is just a CEO telling me, what, that's like super annoying, right? And you might say, like, I'm kind of, I'm fed up with this. I don't want to work here anymore. I want to go work on and do something else. Right, right, right. Exactly. And so, I don't want to be that person. Yeah. And so, you know, I think the way I tackle that particular problem is, you know, I try to be fairly self aware of, like, okay, how people might respond to direction I give them. I, you know, I always try to remind people, like, hey, like, I have an idea or a set of ideas, you're free to ignore my ideas. Like, if my idea is bad, like, fine, like, go do it another way, show me that my idea was bad. And I encourage that debate and conversation. And I think the people who, you know, who work with me in that capacity, you know, for the most part, I think it works pretty well. I think, you know, I naturally enjoyed the, the sort of the fundraising and the presenting to an audience and presenting to, to, to customers aspect of the business. So that came in handy. I think what I had to get better at is, is thinking about how to do that regularly, right? So, you know, we talked about it a little bit earlier, but, you know, by default, I would say I'm a fairly private person, right? Like, sure with my friends in a small setting, I'll tell you all about, you know, what I did on the weekend, whatever, in a bigger group or with, you know, 2000 employees, that's not like my first topic of conversation. Like, I'll just default to like, yep, we do work. You know, what's the next objective? How do we accomplish the next objective? Did we do it? Did we do a good job or not? And, you know, sort of like, it's impersonal. Yeah. And so I had to learn to like, you know, be more human in a sense, right? Like, it's just like, share more about what I do and be comfortable with that. And I, you know, I think, fundamentally, you know, became quite a bit better at that. And that just creates more, you know, kind of connectivity between people, right? It's, it's not just Philip the CEO who gave me this directive or whatever. It's, you know, Philip the human who has two kids and, you know, normal human problems and, you know, we get along, oh, and together, we're going to solve this business problem, right? So that was one. The last one I'll share, which is interesting. I learned this about myself through actually a coaching process and a 360 process that I did for myself. You know, there's a property of me, which is both useful and bad in a sense, right? Which is, I'm very level headed through good and bad. And it's obvious how that's useful now that I'm sort of aware of that, which is like, well, if something bad happens or crisis or stress, it's sort of, you know, I stay level headed. How do we divide the problem? How do we solve it? And I think in my role, that's very helpful because it just, you know, allows me to navigate more steadily. And I think the team appreciates the steadiness. The negative of that is when things go well, I'm also very level headed, right? So you might work for me and you might be doing a tremendous job. And, you know, I'm like, fantastic. So you keep your job because you're doing a tremendous job, which is another way of saying, like, I don't walk around and hand out praise to everyone. And even more than that, I'm an auditory person. So if I do, I will say it to you, but most people are visual people. They remember what's written much more than what's said in person. And so that's like a very tactical, very nuanced example of something I change along the journey, which is now I, you know, actively remind myself to tell people, hey, good job on this project or that project. I usually put it in writing and Slack or email. And so, you know, it ranges from like big shifts to like these little tactics that you need to like adjust along the journey. And I think, you know, it all comes from like building self-awareness, talking to people and like just knowing what you can do better, yeah, and always trying to improve. I think one thing that, being in the office here, I think, is very noticeable. You have a very, you're a very like in-person focus, like, obviously, have a distributed team, but you're very much of like, we like working in the office. The office is super fascinating. You built out a staircase that you put right through the center of the office. Can you talk about that? Why'd you do that? It's kind of an interesting feature. Well, we moved into, we got very lucky. We moved into a large HQ building here in San Mateo. It's about 180,000 square feet. And, you know, it was divided into three floors. And it was kind of cold shell condition when we took the building. And there was just not great connectivity between the floors. Oh, and by the way, by default, we're going to put engineers on one floor and salespeople on another and marketing on another. And so now you're, you know, you're one team, but you're creating these silos. And so that's what we wanted to sort of solve for is, you know, how do you connect people who might not naturally work together day to day on all the problems, but you want them to know each other and be comfortable and, you know, approach each other when they need each other's help fundamentally. And so one idea we had was, okay, let's knock out a giant staircase, you know, through the three floors and literally place it in the physical center of the city block, which is our building. And so we, you know, that was one of those projects. That definitely created, you know, moments of, you know, connectivity and people running into each other. Everyone pretty much uses that. Everyone uses it all day every day and it's it's kind of cool like that. But then again, it's like that was like one idea out of many, right? And then the many little ideas were, you know, for example, having a shirt cafeteria for everyone on the first floor. So that funnels people, you know, at least once or twice a day down to kind of get food, building a cafe that's in our lobby, right? Again, like most people want the tea or a coffee, great place to run in, you know, we built sitting area there, you know, people will hang out and it's super fun. And then it's little tactics like the snacks on the different floors are different. So, you know, you will probably move floors to get your favorite snacks or, you know, whatever else it may be. So, so again, it's like the execution on like many little ideas that I think as a whole, they create this moment of, you know, when people come into our office, they're like, oh, it's very vibrant. Like things are happening. People are here, you know, it's buzzing. And that's that's the objective, right? Like that's what we wanted to achieve ultimately. Yeah, and you're very focused on in person. You actually, when COVID hit, I feel like you were one of the first to really say like we are still very focused on in-person work. And you just kind of explain sort of that story, how that happened, and why it's so important. Yeah, so look, I mean, I think we were definitely like contrarian in a sense to the rest of, you know, what was going on. We, I mean, in March of 2020, like everyone else, we send everyone home because no one knew what was going on. Yeah, you thought like if you looked at someone that had COVID, you might get it. Yeah, yeah, yeah, you did that. That was what we thought. Yeah, that's literally how people fought about it. It's like, oh my gosh, like you have COVID, I'm going to get it and it's going to be really bad. You know, so we knew nothing, just like everybody else knew nothing. But I think very quickly, and when I say very quickly, like literally over the next couple of months, we realized that it's very hard to grow the team. And by the way, at the time we're doubling the team every, you know, 10, 12 months, it's very hard to accomplish that whilst being remote. And of course, we tried all the tools and all the practices that everyone else has done. But, you know, it wasn't quite the same. It wasn't working as well for us. And I think, you know, we're generally speaking when it comes to big decisions, we try to be pretty like first principle, like just think about like from the ground up, like does it, does what everyone else is doing? Does it make sense or not? And if not, like, how would we do it? And I think in this case, you know, we, you know, I deeply remember in 2020, there was this moment of like everyone's going to go remote and in office work is ending and, you know, that's kind of the way of the world. And I think our view was sort of like, well, you know, for thousands of years, people gathered to accomplish goals. And, you know, I don't know that that's going to change because of, you know, this virus epidemic that happened. Oh, and by the way, it's not the first time that the world has seen an epidemic, right? Over the past couple of centuries, and even the past few decades, there have been lots, right? We get them every once in a while. Yeah, you get them. And, you know, in Asia, you had SARS and you had all these like different, you know, things that pop around the world. And so we're like, you know, I think fundamentally we, we didn't believe that that event would now, you know, just make the world fully remote forever. Or at least we didn't believe that that was the right outcome for us. And so, you know, working backwards from that decision, we, you know, invest that and we're lucky. We actually just got into the big building. So we had a ton of square feet relative to the number of humans. So we could space them out. We could put Plexiglas. We, we partnered with a local PCR testing clinic, which was testing us and the NBA teams. Like we were literally some of the early customers. So you'd come to the office and you'd get a same day PCR swab. And, you know, we, we did this for, for months and I think more than a year actually, where employees would just get tested every day, right? And so we had, you know, kind of full data on like, okay, when you got COVID, please go home, you know, all the, all this kind of protocols. But the result, which was really cool, was we ended up building truly an in office culture. So, you know, by 2022 or 23, you know, other founders that some get together would be asking me like, oh, how do we bring people back? And, you know, what's, Philip, what do you do when the first person gets COVID? I'm like, like, what do you mean? Like people get COVID all the time. Like, you know, millions of people got it. Like, like, yes, when they, when they get it or you know, they have it, like you send them home, like they recover, you know, if they need more help, you offer the additional help, whatever it needs. But, you know, like life goes on, like the business doesn't shut down, you know, today, you know, 2025 because, you know, someone, you know, someone got sick, right? So, it was just interesting. It allowed us to stay in office. It allowed us to build a, you know, kind of a stronger culture. At the time, it was tricky. I think now it is a huge advantage to, uh, to our business. One other really interesting feature you're showing in the office was you guys built a bar on the top floor. Yeah. I don't know if I've ever seen that before. Um, it's pretty cool. Can you just kind of explain how that came to me? I mean, look, I think we're not the first. So, so there's a lot of companies that build cool stuff in the office. And we've, we dramatically believe in that. And it goes with what we were just talking about, which is an office culture, right? Like, I believe my, you know, employees, you know, should get along and hang out with each other. It's like it's, it's a yet another social circle. You have your family, you have your friends and you have your coworkers. Um, and so we think of broadly speaking our offices, not just HQ, but every office is around the world as, you know, what are the fun elements? How do we make these offices personal? And what moments can we create for people to, you know, hang out, get together, work together? Um, so to, you know, answer specifically, the lounge we have on on our top floor of the building. When we moved into our San Mateo building, um, the square footage of the building has this awkward space on the floor, which felt like it would be quite isolating if we put a team up there. So we're, you know, brainstorming. Like, what can we put there? How do you use the space? Maybe it's an event space, something else. And so ultimately, um, you know, we have this idea. I was like, well, maybe we should put like a lounge bar hangout area with an outdoor patio. It was a nice balcony. Um, and so we're like, we got pretty excited about the idea initially. Uh, and, um, it was interesting. We, you know, we spec'd it out. And, and by the way, we're still sort of a growing startup, right? So we don't have infinite budget to build cool things. Um, and I remember the commercial builder came back to us and they were like, oh, to build a, you know, this level of thing. It's, it's going to be very expensive. And I forgot exactly the quote. Um, but as a result, we put the project on hold. We're like, yeah, there's no way, you know, like there's other more important things to, to, to, to build out. What was really cool, and I'm sharing this because I think again, it shows you how we think about some of these decisions. You know, we had this idea and it was like brewing in our heads like, we're like, ah, like maybe this will be really cool. Um, and then my workplace team, uh, you know, which again, like we encouraged like the like, what, how would you solve this problem? Right? Like they, ultimately they're, you know, they sort of like got back to the first principles. Like, well, like, how much should it cost to build a cool hangout space with someone brels on the patio and nice furniture and, you know, a counter with, you know, some, some, some stone on it. Yeah, essentially private dinner area. Yeah, little private dinner tables and we had on the side, right? So, so, so, you know, we, we sort of approached it from fresh, fresh principles and we realized that the commercial builder quote for this space was crazy, yes, chronomically high. Like, I understand why, but the crazy high they got to make money. They got to make money. There's margins, you know, whatever, like, you know, and, and, and, and it's also sort of because it's maybe not their bread and butter, right? Like, it's not, yeah, there's a conference room. Custom bill. There's a lot of custom elements and so they priced it out like, you know, the way that maybe a custom area of a luxury home would be priced out. Yeah. And that wasn't compatible with us. So, you know, it was really cool. My workplace team, which is under our CFO, we've hired people on staff, like literally carpenters, drywallers, painters, and we build this whole thing ourselves with our own team. That A proved far more cost effective, which actually resulted in the space being built. And then it became a, you know, yet another one of those advantages we now have, like, with that team on, on staff, you know, our offices can just like we can do more cool stuff in our offices and personalize them. You know, and a kind of a cost envelope that's compatible with a, with a growing startup. And certainly those elements are, you know, massively appreciated by, you know, by our employee base, but also very useful for, you know, things like events and customers and get-togethers and, you know, it's just a pleasant space for people to gather and, you know, talk about products or talk about, you know, their needs as a customer or whatever it may be. Yeah. It's an interesting lesson in, I guess, outsourcing versus insourcing. Yeah. I know, like, what other cases have you done? I've you gone through where you're like, we should probably, yeah, in-source this. We should hire the team, spend a much time versus outsourcing. Yeah. So look, I think we generally, you know, I think we generally try to be very thoughtful about how we spend money as a company. And I always say, like, spend it like it's your own. I think as companies get bigger, you know, it sort of becomes like this arbitrary part of money that, you know, whatever it came from VCs or it came from, you know, your customers or whatever, but I think as you get bigger, people get less responsible of spending money. And so, I think our mindset is very much spend it like it's your own. Like, would it make sense to do this if it was your own money and your own home or you, you know, you wanted to do something? And that leads to some very interesting outcomes, right? So another interesting one in addition to sort of the office one is how we think about tools and stuff we buy to enable our team, right? So like every other software company, we buy a lot of software to build our software, to run our operations, to run the teams. One thing we did there, which was pretty cool as an initiative, it worked really well, was we said, well, you know, we sort of don't actually know how much software we consume and how many subscriptions we have, right? And I think the best parallel on a personal level is like, well, you know, you want it to watch some show and you sign up for Netflix and then Paramount and then Disney+ and who knows what else. And two years later, you're like, oh, I spent like 400 bucks a month on like video streaming subscriptions and I watch one show a month, right? And, you know, maybe that's extreme, like, you know, but the parallel of that for a company is like, at some point in time, it made sense to buy this tool and that tool and so on and so forth. And it just accumulates. And unless you spend effort to go that direction and tell yourself, hey, I'm going to clean up my streaming subscriptions, it's not going to happen, right? So something cool we did and this was another CFO initiative was like, we call this software zero. So we said software zero, like, what can we eliminate? What's not being used? And we just set to the team, you know, if you get together with another employee, if you find things that we have that are not being used, we'll pay you a thousand bucks, which sort of like a token amount, right? But but but I think people, that's a lot, huh? That's a lot. That's a lot. And it's cool. Like, it's a project you can do, but it's, you know, relative to the amount you're spending on the software, you know, probably not that much. Or at least that's, you know, that's kind of how we're thinking about it. But it gives the incentive. And I think it, you know, for any employee, it's also really cool, because it's like, you know, credible, meaningful thing I've did that improved the efficiency over the whole of the whole business. And so, you know, we roll this out. I want to say maybe six, eight months ago, something like that. And we didn't know if anyone would care if they would do it or they wouldn't do it. It turned out we we paid out, I think, on the order of like $25,000 in these bonuses. So awesome. Like 25, you know, people did something to remove software. The total savings in the software that we didn't use that we now don't pay for, $1,134,000. So just awesome, right? Like it's just good hygiene. And so I think, you know, things like that, you know, we, like, they're good examples of things that I think, again, if you, if you don't put an effort or if you don't think about, you, you know, you revert to some mean, which is probably not the greatest, you know, position to be in. And so it always takes these efforts that, you know, okay, like, how can I course correct? What can I do with the company that puts it back into the mode that I want to be in, which is, you know, efficient, fun, fast-moving, building the best product, supporting the customers in the best way? Yeah, that's insane ROI. It's like 40X ROI. Yeah, you do it any day, all day. Yeah. Interesting. One thing, maybe one last topic to end on, just talking about long-term business, building a sustainable business. How do you think about it over the next couple of years? Like, are you, are you one of those companies going to stay private forever? Have you thought about, like, going public? Like, how do you generally think about that? Look, I think in the long term, I think, you know, being a public company is something that will, you know, that is on Vercalas' journey. I think the way I think about that very decision is, is what's the most effective way to building a good business that's efficient, that's generating returns for, you know, kind of for shareholders, for employees, so on and so forth. I think, you know, the reasons and the way we would kind of think about it is we're efficient enough that raising capital privately today is fairly easy for us, right? Like, if I, you know, needed additional hundreds of millions of dollars to invest in the business, we could do that privately, we could do that publicly. I think some of the reason that the company will ultimately, you know, go public at some point will be, you know, the returns for, you know, the early employees, the investors, so on, the liquidity that comes with that. You know, in the interim, we've also done things like tender offers for, you know, for some of our employee base, which are, you know, it's sort of a great tool, you know, for the interim, sort of between the two two states of the business. WordPress, I don't know if you've ever used WordPress before. 43% market share of like all web sites on the internet, like insane stat, but they have an interesting program where they have this quarterly and biennally liquidity program for employees. I don't know if you've heard about this. It's similar to what SpaceX does, where it's like, they'll, you can buy shares in employee, you can sell shares, they just mint like off the balance sheet, the company will kind of buy back from whoever's out there. Yeah, missing. And I remember like, Palantir did it back in the day. And you know, so there's like, I think there's various ways of, you know, kind of providing liquidity. Yeah. It just, you know, ultimately depends on like, where the path takes the company. And you know, I think the other thing that I frequently tell my team is, look, it's, we certainly have the scale we're going public is feasible, right? Like if we wanted to go public, you know, in the next couple of months, next year, we could do that. The big question becomes like, how do you do that successfully and how do you maximize the growth opportunity for, you know, for the company, you know, over the horizon of over the next, you know, five years, seven years, decade. And I think what I think about a lot, which, you know, I think is an easy exercise to do is if you, you know, if you think about startups and then companies who become legendary companies who last for decades, a lot of the value of those companies is the result of compounding for a very long time, right? So if you, I don't know, looked at Google's or Amazon's or pick your favorite tech startup stock chart, and you sort of zoom it out to the max, right? And you know, you look at that chart, it's going to look very flat for the first many years. And then the compounding happens later. Now if you zoomed in in those early years, you'd be like, oh my god, this thing was growing like crazy. Yeah. But, but I think, you know, my point in that and, and, and then sharing that often with my employee basis, like, look, like, what do you really care about or what you should care about is how do you position this company in such a way that it is set up to do that compounding for many, many years to come. Because ultimately, I mean, that is a, you know, fantastic way of generating return for the shareholders and, and, and, and, and everyone involved. Yeah, I think that's a good way to end it with like customer obsession. Kind of sounds like the, the general, the general, uh, forcada ethos. What, um, if you want to find more about forcada, about you, yeah, what's the best way to kind of fall long? Yeah, I mean, we are, uh, so for cuddle.com, obviously for anything product wise, uh, you know, any customer intros like we love to do it, uh, and we will do everything from giant commercial spaces, you know, all the way to, you know, we do some high end homes. Uh, we're not a consumer solution, but we will do, you know, the, the sort of mega homes, you know, if you have an enterprise home, if you have an enterprise home, talk to us, our stuff is really cool. Or if you really like gadgets and stuff, uh, you know, as an engineer, like we'll send stuff out pretty freely and, and, and you can, you can play with it and check it. Can I order that on the website or would I prep the email? Uh, you'd, you'd probably like fill out a form on our website and we'll be in touch with you very, very quickly. Um, but, uh, but yeah, I mean, it's, it's very simple to set up. It's, you know, the products are really cool, uh, and then we have a lot of material on the, you know, on our site, but also on YouTube and on the web about just how Verkata stuff works and, and how it works for our customers. Um, yeah, and it would be, you know, if it sounds interesting, like join us on this journey, I think, you know, one thing we didn't talk about is I very much believe that, you know, we're at the beginning of this journey, right? So it's an, I have to remind the team of that all the time, right? Like Verkata's 2400 employees, you know, you know, close to a billion in, in, in annual sales, but if you think about the sheer number of buildings in the world, we're just scratching the surface, right? Uh, in the, you have an estimate on like market share, just like percentage of buildings. Yeah. So, you know, I think in video, which is where we started, you know, we're in the top three video sellers in the United States, video security. So we're, you know, fairly, you know, get kind of getting there. Um, you know, if you look at the market penetration, it sort of depends by segments. If you zoom all the way out and you're like, how many commercial and government buildings order in the United States, uh, we're sort of at like low single digit percentage penetration of those buildings. So still very early. Oh, and then if you extrapolate and you look at the rest of the world, it's much earlier than that, right? So, uh, so, so even though, you know, I think revenue wise, the companies become meaningful, there's just so much of this type of infrastructure in the world that, you know, I, I think we're, you know, at the beginning of that journey. Um, and I think, again, I think some of the, the things we're seeing, the, the sort of progress in AI and, and, and, and, and, and, and just general rate of software deployment to these, uh, to these locations. Like, it's going to be a fantastic next 10 years in terms of like the growth of the business. I feel like that's, uh, an interesting place to end it. Thank you so much for taking the time to do this. This is a lot of fun. Thank you. I appreciate it. And thank you for listening. If you missed it, make sure to check out last week's episode with Ofect Lavin, a building forage to power the trillions of dollars of restricted payments in the U.S. Tune in next week for conversation with Colin Sedotti, an all his lessons learned of building clerk, the most comprehensive user management platform. If you like this episode, please leave a quick review or comment wherever you're listening or watching. And if you don't want to miss a future episode, subscribe to my newsletter, the split to get each one plus a transcript, email directly to your inbox every week. Thanks for listening. See you in the next episode.