Speaker 1Ramp is the only platform built to make your finance team leaner, faster, and better, saving businesses 5% annually on average so you can stay focused on growth. Ramp just opened for business in the United Kingdom, so if you're running a business in the UK, you can now use Ramp's AI-powered finance platform to manage cards, expenses, bills, approvals, and accounting all in one place. I run my business on Ramp, and so should you. Learn more at ramp.com slash invest. Open AI, Cursor, Anthropic, Perplexity, and Vercel all have something in common. They all use WorkOS. And here's why. To achieve enterprise adoption at scale, you have to deliver on core capabilities like SSO, SCIM, RBAC, and audit logs. That's where WorkOS comes in. Instead of spending months building these mission-critical capabilities yourself, you can just use WorkOS APIs to gain all of them on day zero. That's why so many of the top AI teams you hear about already run on WorkOS. WorkOS is the fastest way to become enterprise-ready and stay focused on what matters most, your product. Visit workos.com to get started. Rogo is the AI platform purpose-built for financial institutions serving tens of thousands of bankers and investors at hundreds of leading firms worldwide. Rogo's AI agents autonomously execute large chunks of your firm's workflows. They can screen deals, draft SIMs, run buyer outreach, and do diligence on data rooms, all with full security and compliance handling. Every action feeds Rogo Intelligence, the firm's context layer, turning years of deal experience into a secure, governed, institutional memory that makes each new transaction stronger than the last. To learn more, visit rogo.com slash invest. So, Christine, I've been so excited to do this with you. I think it's been five years since we last did it. A lifetime ago. A lifetime ago. You've been very successful in the intervening five years, so I'm excited to catch up. Can you give us, like, the one-minute history of Vanta? I know we've done this before, but just to level set for people, when you started it, why, what it did then, how it's evolved, what it does now, quick overview.
Speaker 2I started Vanta about eight years ago, which feels about 8,000. Yeah, exactly. You're, like, in 17 centuries ago, with the premise of, can we help companies build and earn trust? And build trust is, like, start security programs and compliance programs or mature them, and then go get credit for their customers through audits, like a SOC 2 or ISO 27001. Security questionnaires, trust centers, but basically this idea of, can we build a security company by helping companies implement security because it's what their customer is asking for? So we were initially known for SOC 2, billboard, we do have a billboard on the 101 that we're mostly known for making billboards, I joke, but it started very compliance, very audit-centric. The idea was always, hey, that's just one way to get a company started on this. Since then, we've gone into different. We've gone into different areas of security, we've gone into different ways of earning trust with your customers. Today, we're about 16,000 customers global with about five products.
Speaker 1How did you win? This was a new category when you started, and I remember I had to go through it, my old business, get SOC 2 compliant and certified in order to win certain accounts or whatever. So it became an important thing, kind of in the software era, there were many companies, I could probably name a handful, that were trying to do what you're trying to do. Yes. You've emerged as sort of the only major winner. What would you attribute it to over the last, since we last talked, like how did you win?
Speaker 2Execution, software, the blessing and the curse, and this is more true now even than it was five years ago. You're really only as good as the last thing you shipped. You can be first and you can start it, and it doesn't really matter. And it's more true now because it's like someone can vibe code your thing in a weekend. So you've just got to constantly be shipping new products, new features that make the experience better for customers running on that differentiation. There's some feature level. I think the other thing we really invested in when it got competitive that was very good was integrations, pulling in data from other tools. So now you can connect Vanta to one of 400 tools. We pull a ton of data out of those tools, and that's what powers the automation, the agent, the AI, all of that. We call it our trust graph. It's really just like a security data lake, and that is bigger, broader than any other provider, including some of the software. We call it our security providers because we touch areas they don't. And I think in retrospect, that data foundation has let us build new things faster, software and agent. There's that piece. And then I think on the go-to-market side, it was like just keep pushing. Good billboards. Shockingly good. Compliance that doesn't suck too much, which got really popular on rslashaccounting, which none of us knew was a bucket list item in our lives. When rslashaccounting likes your things, you're like, okay, something worked. And then the lived experience is just you can feel. Like you are going as fast as you can, and you should, in fact, lean in further and push harder.
Speaker 1What was the scariest moment?
Speaker 2The last 12 months, SaaSpocalypse. You're like, okay, great job building a system of record. You're now screwed.
Speaker 1You're now worthless.
Speaker 2Yeah, exactly. You're worth, like, good job playing the game. Here's some steak knives. Parts of that are true and parts of it are not true. In the vein of you're only as good as the last thing you shipped, you're like, great. What is the agent? You have all this data and a system of record. Fine. What the heck are you doing with it?
Speaker 1Say more about what that's felt like. Roughly, Vanta is a business that is growing very fast. By historical standards, with very high margins. Yes. Which, four years ago, is considered, like, the best business model ever. Nothing changed about that. I think you're probably growing faster. Yeah. And the margins are still really high. And yet the market has decided that the multiple for a business like yours is a third of what it used to be or a quarter of what it used to be. What has it been like to live through that as one of those entrepreneurs?
Speaker 2Cognitive dissidence. You've got to hold two things in your head, right? One is, I think, at the fullness of time, a 80% growth business with 80% margins will, actually, be better than, over the same time period, run it out long enough, a 160% growth business with 30% margins. One of these will, like, return more cash in the fullness of time. But today, the latter is valued at 3x, 4x, the multiple of the former. It's a 10x the multiple of the former, right? And so there's a part where you're like, hey, guys, everyone's being irrational here. This is a good business, and you have to keep doing things that make business sense and doing the things that customers want, which may or may not be token pricing models. That puts you more in the latter category than the former profile. And then there's, like, a very clear, like, game on the field piece. Well, if you need to be financed, again, you're looking at investors today, many of whom are kind of AI maximalists. Talk to firms that are like, yeah, we'll invest in the labs, and we'll basically invest in tractors in Iowa. Nothing in between. Robo tractors in Iowa and a lab. And, like, everything else. And you're like, oh, interesting point of view. And from a, like, talent perspective, you hire ambitious people. You want to do things. And if it feels like they're not in the right boat, they're going to change boat. The talent war part is very real, too. And so you've just got to live with the fullness of time. I think this will all sort itself out. And you have to live for the fullness of time.
Speaker 1So there's this funny fear that now, like, bending spoons is the grim reaper in the hallway, you know, meme or whatever. No one wants to be a bent spoon. Love bending spoons, by the way. I think it's an interesting question of the siren song right now is sell tokens via agents for security and compliance. I'm sure or something like this. Lots of thoughts on this. I'm just so interested by companies like yours that were sort of winners of this last era that now have to make a set of decisions. Look at the 10 year rate. The cost of capital is going up because you can put lots of money, a really high return in AI stuff for the time being. Someone looking at your business is like, well, I want higher returns or the same returns. And I get that through agents or something. Talk me through what it's been like to make the decisions. What are you thinking today? Do you think of yourself as an AI business?
Speaker 2What's that? So we do when we go benchmark. Where we are from an agent in our product perspective against, quote unquote, AI applications, we have yet to find someone who is further along. You could be like, we're doing a bad job looking is the obvious critique there. We are like constantly going to the set of names you imagine when you think AI applications and generally finding they're not yet where we are, where an agent is doing most of the work. It's chat based, but there's like long running agents. Our agent is auto generating UI on the fly because sometimes you want chat, right? And sometimes you want UI, but we just have an agent that is building UI user can do something, comes back in the flow, keeps it going very much optimized around the like keep the user going in the flow loops.
Speaker 1So I make sure I understand, meaning you are like a watchdog that's always on watching the security. So we are definitely that.
Speaker 2But in some ways, you're like you could do that in the past with just like monitoring and alerting. This is more like the Vantapro. The product experience is now oriented around an agent that is bringing you as a user things and often saying, hey, I went and did this for you. Are you good with it? Then I will go do it. OK, great. The next thing I think I should do.
Speaker 1What's an example? Just like ground that in an example.
Speaker 2Someone just left your company and you didn't get them out all of their accounts. I just wrote a custom agent for you that will go do that. Do you want me to go turn this on? Great. Do you also want me to go remove accounts access from these three people?
Speaker 1Great. So it's not just here's a red alert that someone didn't meet the monitoring stack. It's like, would you like me to go do this?
Speaker 2We're taking a lot from the AI labs in their UI, but it's like, you want me to do this once? You want me to do this always? Great. The idea is like the agent will just be doing more of this work with the user's permission. But it's like if they tell us to go do it, we're just going to go. In the course of that, we end up using a lot of tokens. We have talked to our customers a lot about token based pricing. And I think what we've generally heard is like people are real smart. So if you try to charge them based on tokens, they are very quick to say. Oh, you've just marked up a clud token, Forex. Are you Forex as good as Claude? I don't know. Let me go try it out. You actually put yourselves in a competitive position against the models that probably no application really wants to. Like we can talk about what Harmony says. You don't want to get there. What we've seen on token pricing is if you're trying to mark up at all, users are very smart and you will lose on that comparison. You can like not mark up. And this gets to the margin question. But anyone who is marking up Claude tokens Forex and trying to pass that off to their users, I think. So what are you doing? We're eating the token cost right now. We're just taking lower margin. We're taking lower margin and really concentrated on usage. That experience that I just talked through where the agent is going off and doing things, we just fundamentally believe that is a much better user experience. And we've got 25% of all of our customers in that sort of flow right now. We can get that to 75%. One, I think we'll have like much better retention. A much better customer experience. And then if we need to go sort out pricing later, we should go sort out pricing later. This is a usage phase and like a deployment phase of this technology and just go nail that. And you can figure out commercialization after.
Speaker 1I'm also so curious that you said marking up a Claude token. But what about marking up like a Kimmy token or like something that's much cheaper? What's it been like deciding what to use? What's good enough versus cost?
Speaker 2This is something we started concentrating on at the beginning of the year is basically evals. Task specific or agent. Agent specific evals. From a product perspective, we call it all the Vanta agent and it's one thing. Of course, behind the scene, it's like hundreds of agents that all have specific tasks and use tools and have computers and that whole setup that I think everyone's converging on. But in the beginning of the year, really invested in using our subject matter experts. So the folks who like RAM security and compliance programs at other companies to write the eval frameworks and then eval their evals and using tooling for that. When we think about model swapping, it is. Mostly quality. It's not cost. I also think some of it to this is because we don't use as many tokens as coding. Coding is encoding agents, lots of token use, maybe legal and like document drafting next. And then when you get to more of the decision action world, which is where we are relative to coding, we just don't use that many tokens. So that lets us optimize for quality versus being as concerned about cost as some of the other companies.
Speaker 1When you talk to other founders, both of your era and of the. This new era. What are they doing here? Are they also eating the cost and just charging a software fee? What do you think the end state is going to be?
Speaker 2I think everyone wants to get to outcome pricing. Everyone wants to get to that. In another life, I was a microeconomic professor. Like I love this conceptually. You would get paid for outcomes and the alignment of incentives. Love it. The hard part is what are the outcomes? Support ticket closed makes a lot of sense actually to that, maybe differentiate outcome and output as I understand it. In support, the ticket closed doesn't output. The outcome is actually my Sonos now works, but even like the ticket close, that is relatively unobjectionable. I think a lot of companies included are trying to figure out what's that like neat unit of work that we can all agree on. And you can say, Oh, it's a document drafted. It's an alert closed. It's an account off-boarded and you can kind of do that. But then there's just so much cognitive overhead. Cause you're like, I just named three things. I could name another 47. And then our user has to be like, Oh, well, if I do this with the agent, I paid this, but if I do it, I'm like, you know, and you're just like, no one wants that. Everyone I talked to wants to get to outcome output pricing, but it's really not clear how you get there. Charging tokens themselves really puts you up against cloud. Then people try to obscure that by charging credits and having some like credit token exchange ratey thing, which I think again, user are smart and they're like, I see what you're doing and I see you've obscured it.
Speaker 1Fine. Are you similarly far along? And if you compared yourself just as you did just now to companies and how you're building product and the business using these tools, what are you doing? That's interesting there.
Speaker 2In the vein of eight year old company and eight year old code base, it is so much easier to throw the coding agents at a small code based on a large one. And that's like a token input thing and they're getting better and better. But one thing we've spent a lot of time also investing in in the last year, and I know notion has spent a bunch of time in and they were like nine months ahead of us on is module. I think parts of the code base so that the agent can just understand smaller parts of it and understand it fully and then be really effective. Whereas if you chuck it at again, eight year code base site unseen, it just doesn't have the context window to understand everything and we'll do silly things. Then you need a high context engineer to babysit it, which is helpful, but sort of invalidates some of the point companies have always had this problem. They've just talked about it as, oh, when we onboard a new engineer, it takes them a while to figure out the code base agents have made. It's like, well, great. Now we want to onboard nine thousand new engineers tomorrow. So it's just like heightened that problem. I give ourselves a lower grade on that. We are like in the process of using agents and people to make the code base easier to understand to.
Speaker 1You've had to grade yourself one through ten about, wow, this changes everything. Building this company from this point forward is going to be totally different. Is a ten.
Speaker 2Yeah, like nine. Yeah, you are like eight, nine. I mean, I think the principles are still the same. Everything is hard. People matter. All the tropes are still the tropes. But the way you do stuff, it should be quite different.
Speaker 1Do you feel like there's a separation happening again? If I took your cohort of the successful eight-year-ago-era companies, do you feel there is a bifurcation where some have gotten the memo and are doing really well and some are just going?
Speaker 2Yeah, kind of. I think there are just structural parts of some markets. And I think that it's very good at identifying these where you can put any entrepreneur in the world in that structure. This is kind of like the like this market or founder win. Andreessen Horowitz thing and you're like market wins. I think that is still true. And I think this AI technology shift has made what some markets that used to look really good look really bad. The best person in the world can run in that and will still run into a brick wall. And I think there is a founder motivation piece where it's like you got to be in it and like push in this era. And if you don't want to do that, totally fine. But the rest of the company will not self-organize to do so.
Speaker 1Vanta automates compliance. So your team can spend less time on security. So you can close deals faster and with less friction customers report a 526% return on investment and more than 16,000 companies use Vanta including ramp RV and Snowflake get started with $1,000 off at Vanta.com/invest. Ridgeline is the first end-to-end system of record with embedded. AI for investment management firms running portfolio accounting reconciliation reporting trading and compliance on one unified platform. Firms are moving off Legacy technology and onto Ridgeline because of how far ahead Ridgeline's AI features are compared to anything else in investment management software. I've been hearing from a lot of investment managers about AI and they fall roughly into two camps with some unsure where to even start and others convinced they can build their own order management system over a weekend. The reality is that running an investment firm will. Always require governance controls and a single source of truth for your data and no amount of AI enthusiasm changes that requirement. Ridgeline is built on exactly that Foundation, which is why I believe that the firms that come out ahead in the AI era will be the ones running on Ridgeline's unified platform. If you're serious about your firm's AI strategy Ridgeline should be part of that conversation and you can request a demo at Ridgeline. AI. So given that you've been at the edge, what's the adopting AI 101? If you're. Back to being a professor would have been the most important things that have been hard to do, but have proven fruitful.
Speaker 2Just getting people use it, which sounds obvious, but definitely use it yourself build for your company personally does not matter. Understand where the models are where they're good where they're bad. What harness means do that at least every two weeks because it just changes so quickly. You have to have this role understanding of what works and what doesn't so that when somebody comes and they say we're going to fire all of our SDR is because I built. One agent and you can kind of be like, did you now where is that true and where that false? There's like a be in the mock. You want to get as many other people in that as possible. Broadly generalized. It's very black and white. Some people just go do that. And some people don't if you'd asked me a year ago, you'd been like, oh, well, there's some intrinsic motivation and the people who aren't separate problems go deal with them. I think I'm slightly more empathetic now in that we have seen very strong. People not go dive in and you have to nudge them more about try to figure out what's blocking them and something can be blocking them and you can get people into the muck. Even if they don't dive in initially. So if you're a small company starting out on Vanta, great. We've got this set of controls for you. You adopt them. You may be mess with them on the edges, but you're like off to the races. You're a larger company. You clearly run a security and compliance program and you come to Vanta because you want that visualized. You want the automation and you want the monitoring you want the real-time dashboards. You don't. The like Jira ticket thing. Fine. Well, the hard part is you've got to get all that existing stuff. The controls, the risks, the data, the policies, the procedure, all that stuff in the Vanta classically, the way you would do that. SAS company is you're like, oh, we're going to make an onboarding wizard. It has four steps on a progress bar and we will like give you confetti. You're going to do that whole thing. We were setting out to build better onboarding this year and the first couple product reviews. The team kept bringing onboarding wizards. Like stop with the onboard like no go use an LLM stop, but they kept bringing onboarding wizards. And this was like a. motivated team talented people they cared and kept bringing onboarding wizards we finally got the experience now they shipped and it's working it's basically clawed big canvas drag all your messy files in drag in all your screenshots we will like make sense of it ask you questions and then you are set up and off to the races and it works really well why were these smart motivated people bringing onboarding wizards so you go out like finally and the thing was they were like well we don't know if we can get the like drag your files thing to work it might not work and we know the onboarding wizard will work because we've built those before we basically don't think we're allowed to fail on this project oh that's the thing great we're just gonna bet that the llm flow is gonna work and we'll make it work and we'll hill climb all we need to but burn the boats and just make this thing work and then they were like oh okay great do we have to do this now we're gonna do this now we're gonna do this now we're gonna do this now next product review tomorrow but it was this like funny thing where you're like i would not have guessed that was their blocker and you saw that and they were like going you mentioned the talent
Speaker 1war thing before there's this big trend low margin high growth thing where from an investor's perspective the funny example you gave of a lab or a tractor everyone wants something that can be that thing tell me about how you're going to be a hundred billion dollar business or a trillion dollar business somehow now every business needs to be that big what's that like to face down where you may not be building a business but you're going to be building a business that should be a hundred billion dollar business there's like a hundred of those in the world
Speaker 2there's not that many yeah and it's not to say vanta won't be it's funny for me it's like oh should i adjust the pitch and be like well inevitably the baseline here is vanta's 50 billion the real question you should be considering if you join can you take us on a journey to like 250 billion should i just start saying that probably not but the answer is not definitely not totally because you're like well that is the pitch that people who work at vanta are getting from other companies the market now is saying that so much you do seem unambitious so
Speaker 1what do you do
Speaker 2there's a vanta principle value a principle of do what it says on the tin do what you say you're gonna do i'm like you can put ambitious things on a tin it's not that don't over promise and under deliver what we do is give some of that here's what we do as a company good bad and different here's the context now let me talk to you about the business metrics and we'll generally just show it's different but i'm going to talk to you about the business metrics and we'll generally just show it's everything it's fine they're good we don't really want them to leak but if they leak it's not the worst walk them through that and what we're doing and how that grows over time try to root it in all of the facts and all of the data and so in some ways it's counter the vibes with data and trustworthy vibes versus yolo vibes so what is it
Speaker 1like in those talent wars if the most talented people are being told this thing's going to go to a trillion basically
Speaker 2every other company that's well we're six billion today but sequoia is going to do a 10 billion dollar check in a month and then somebody's going to write it up to 25 next year but we can get you in at six today that's a good one that one's tough so you're
Speaker 1faced with that like what do you do do you not want those people maybe it's a filter
Speaker 2sometimes i think if you go to the person and be like what are you optimizing for why did you entertain that but not in a pokey way just what's annoying you at vanta one of these in specific very strong leader still at vanta it was basically this person felt like they couldn't make decisions that would put vanta on a similar trajectory and that would be their preference but they're like oh but this new place is promising me full decision making authority on this trajectory totally fair feedback what do you need to feel like you can make these decisions like just go make these decisions go there's a money part and a fomo part for sure we've definitely gone up on comp and comp bands are kind of a joke now the comp band is whatever data you have is it is what is being offered to these people
Speaker 1how much more do you pay the top person at vanta than you did like as a multiple versus like oh i
Speaker 2think we should have way more comp dispersion than we do
Speaker 1so that's interesting but if i go five years back and that person made x dollars what multiple of x does the person make now
Speaker 2total comp it's probably like a factor of 10 wow i think it actually should be higher my comp philosophy is you never pay the top people enough enough you should always try and you will never hit it and there's a bunch of people you pay much more than their contribution
Speaker 1say a bit more about what those top people are doing that's so valuable
Speaker 2typically high agency get shit done that sounds so milquetoast and that's worth millions of dollars but like yes actually it is a high context person who understands the company and the customers and the domain making generally reasonable decisions and sometimes bad ones and then iterating on their bad ones and just moving is so valuable do you
Speaker 1think it'll be 10x again in five more years or is that starting to get too crazy is the rate at which the most valuable people are getting more valuable staying the same accelerating accelerating the
Speaker 2counterforce is at what point will investors get more concerned about dilution and stock-based comp which they weren't throughout the 2010s late 2010s we had more of a like stock-based comp conversation as an industry in like 2022 23 now we're definitely not talking about it that's the counter side without that push on like dilution i think people just get paid more and more that's
Speaker 1probably probably should how much you care about your valuation and multiple and the engineering of those things i've
Speaker 2historically not cared and sometimes even done things to like demonstrate my not caring i care about ar and ar growth i pay a ton of attention to those and those are the metrics i think i've now been through enough valuation environments like 2010s 2021 2022 seeing the like multiple roller coaster where i just don't put a bunch of stock in that or i used to not i think the thing i care a bunch about that then will get me to caring about these multiples is the sentiment of people who work at vanta and they feel like they're at a company that is growing and growing and then both in general growing and then growing relative to other their other opportunities in the market there's a part of the market that is raising money every six months that 5x the prior valuation and that's a real talent competitor and what about
Speaker 1things like tenders have you done this historically
Speaker 2we have not done them historically but the game on the field is you're doing a tender every time and you got to do them does
Speaker 1this feel unhealthy
Speaker 2totally my opinions about it don't matter and have all the feelings i want in whatever direction about tenders they are normalized and people expect them and they expect it as part of their comp and if you are not giving it to them you gotta give them a bunch of other stuff to make it up how does all
Speaker 1this affect your exit ambitions to go public or to be sold or realize some end game for vanta not at
Speaker 2all not really which is again a very founder privilege statement but the end game is how long can we keep this going for and 99 of the big independent software companies in the united states are public yes ipo in that sense i don't have it as a bucket list item myself it's more of like means to an end lots of people join companies and want the bucket list item so founder privilege caveat here again but goal is big independent standalone company on
Speaker 1all this stuff tools for building ways of building kind of all these kinds of things i'm asking about what do you think is overhyped and underhyped
Speaker 2underhyped is knowing the company and the customers relative to knowing the skill set it is still really hard to hire train on board make effective people who join a company company brains make this better and easier and like put information at fingertips but there is still totally something to be said about someone who's been in a company knows how to navigate the company knows the customers all of that i'm at a fuse right now where we value that skill set more than like the vertical skill set of you're good at sales you're good at customer success and would take a worse salesperson on sales skill who knows the vanta pieces more there's something in that and i think especially as a lot of the labs and fast-growing companies are building out go-to-market teams i think they're actually very much evaluating you're a good salesperson that's slightly off and then i think as we think about building agents for all of this the company context piece the customer context piece is probably being relatively undervalued to like you are a good salesperson the less valuable skill slightly today than it was four years ago
Speaker 1what about overhyped
Speaker 2token-based pricing low margins for the sake of having low margins custom training models for the marketing value be able to say
Speaker 1we post-trained a model on our stuff explain why go talk
Speaker 2to the inference providers and sometimes give them depending on the provider give them truth serum they will say like look the reason to post-train a model is cost some businesses have that need but there is not a quality reason to do it there's kind of a marketing reason to do it right now in this environment and i think there's a lot of post-training for marketing reasons for investors and for customers mostly for investors actually if
Speaker 1one of those people were pitching the other side of this the value of post-training what is the pitch to you one of these companies comes to you and it's like we'll do xyz for you what are they saying and what do they say the benefits are
Speaker 2you are putting a stake in the ground of being a real ai company customers will notice i think that's the primary one i do think there's a secondary one in some use cases of like a form factor thing and i think especially with large enterprises you want to deploy a company that's going to deploy this piece of software wall to wall that requires integrations and 17 people to sign off oof that's a whole thing why don't you just give them a like model specific to them for this use case i think that's semi-reasonable so if i was
Speaker 1one of these people and i came into vanta what does post-training literally mean what would it mean in your context what are you doing what are the steps that you would go through so we would
Speaker 2need a bunch of data from that specific customer and then go write a bunch of eval then change model weights based on that customer specific data the process
Speaker 1would be they're trying to achieve something they've got some data you tune a model to achieve the thing increase the eval and then sell them that
Speaker 2exactly on an ongoing
Speaker 1basis and your point is that that's overrated because it doesn't actually improve their it can i
Speaker 2think i'm skeptical in a couple ways i was like does everyone really want to be handed a model or there's so much around that from user experience perspective from a deployment perspective form factor it feels a little like you know in the social media or like your mobile apps when we like we hadn't figured out pull to refresh yet that's a little bit of a problem i think it's a little bit of a problem i think it's a little bit of a problem i think it's a little bit of a problem i think it's a little bit of a problem it feels a little like you know in the social media or like your mobile apps when we like we there's something here i don't think anyone actually wants to be handed a model the same way it's like hitting a refresh button i don't know that sounds silly but that's what we did in 2011 there's some version of that here we haven't figured out how this actually works and handing models i think is not the right reasonable iteration but like not the right
Speaker 1solution is there anything else like in the popular discourse that you think is crazy
Speaker 2fdes i kind of think fdes are crazy i think it's a great talent arbitrage the same way like chief professional services but i think if you call it a professional services role that's a very different talent profile than fde in the current discourse and i think you're not going to get the harvard cs grad who's high agency and wants to go do things and learn how to build a business to go sign up to be like pro serve person number four or number 12 at a company i think there's a real job there but i think this fde wrapping around it is probably not going to stay the company that we all think does as well as palantir which i think they probably do they have eight figure contracts there are some companies that have eight figure contracts i think we're using all fdes in a place where there's like five and six figure contracts and those economics probably are upside down we're in an again era of 30 growth margin better and so that sort of works that doesn't feel sustainable when
Speaker 1you're at like a dinner in san francisco with other founders what are you talking about are you talking about models and which ones to use what actual topics of conversation between founders right now
Speaker 2there's definitely like talent war pieces there is a time this is more nine months ago but it was the joy to grow around the table and complain about cursor they're taking of everyone there's definitely that piece there is a bit i mean i'll take fdes of do you actually do this is it working where are you on this right now personal agents which ones do you have what are actually useful
Speaker 1when you think about the open source stuff chinese model what have you learned talking to people around the world that are grappling with these same questions
Speaker 2i was with our customers in france a couple weeks ago which was lovely one of the things i was very surprised to learn is a lot of the french software companies in paris are using chinese models predominantly i initially thought it was nationalism maybe anti-america you know just something there and stupidly suggested that and someone very quickly corrected me and said absolutely not we basically all switched to chinese model when trump closed fable off to non-americans and we just kind of realized there's a huge business continuity risk we can't trust that if we build a business on one of these american models it'll always be available so we stopped
Speaker 1doing that if you dream the most about where the business could go over the next several years what's the version of vanta that could look like
Speaker 2that we think of vanta as a security company started with compliance the best version of compliance is a security company that has a security company that has a security company is proving the security you have you've got to have good security we think we can and are moving into a bunch of security domains and sort of a platform pitch of like look we've already got the data we've already got the intelligence via the agent we can start stacking products on top of that and more security focused products as we understand the security of all these companies the pressure on them to go prove they're legitimate and industrial grade is just going to go up that's one of the founding thesis of vanta eight years ago but it feels even more true now whether they're working with enterprises governments regulators lawmakers you just have to prove your software is industrial grade in lots of ways and that will happen more and more in more and more ways in the future and vanta is the thing that connects both sides of that marketplace so
Speaker 1what's the direction of security this is of course an incredibly interesting topic early internet everything broke everything got hacked this will probably be that times 10 or times 100 does security mean you compete with crowd strike and places like that what does security mean and what's its trajectory in this crazy
Speaker 2era these models just are so much more persistent than people they will just try nine quadrillion things the way a person would give up after i don't know 9 000 and then in the course of that they find things and chain things together a lot of the discourse is around zero days and there's definitely some of that these models are finding that we didn't find before or didn't publicly find before i think what's more so happening is these models are able to chain 17 benign ish or benign on their own things together and then really find something if you watch the open ai talk at rsa about hugging face it's basically that persistence putting together things that on their own people would have been like that's low severity i'll fix it in 90 days but that update which i think is tough and we have to fight with machines because it takes what was oh that's important but low severity and again 90 days i'm like i'm gonna fix this other stuff first it just turns the prioritization on its head and saying it makes everything critical isn't helpful because you're like well what do you do then but i think what that ends up looking like is you've just gotta fix stuff as fast as you find it and some of the prioritization does need to go out the window but if you're fixing things at machine speed you don't have to prioritize so that's what i think we're gonna get to but i think it'll be rocky as we get there
Speaker 1so as i visualize that what that feels like to me is a constant penetration test yes where an agent is trying to break in like a white hack hacker agent all the time and then every time to find something it's like got a buddy agent that's a patch goes fix it yeah is that like the ultimate product vision then
Speaker 2for some parts of vanta yes i think we can do that in very compelling ways for the bulk of our customers i think crowdshack will do it better for an enterprise this is where choosing where you play and what market segment is most important
Speaker 1there is there a firm that's doing something now that you start to encroach on like of the
Speaker 2traditional security different markets i mean take a ongoing penetration tester and remediator fixer we think we can do that for the cloud providers like an aws any i'm sure like misconfigurations there classically we can do that for the cloud providers like an aws any i'm sure like weasel does that weasel will do it for its customers weasel's customer base starts at a multi-thousand person company and their price point counts starts at a multi-thousand person company we're more thinking about the platform as where are we already embedded with customers where are they unlikely to go pay 150 000 for whiz but very well could pay 40 or 50 for something suited to them thinking through where are we already strong and where are the competitors focused elsewhere but probably on a more upmarket segment
Speaker 1your personal motivation changed you set out to build this thing i remember talking to the first time about this very charming way you built the original product building an excel first and this sort of seems very old school looking back on it there's always like the dog that caught the car thing we're like yeah you built like this huge software business amazing how has your own motivation evolved or changed through all this why keep going
Speaker 2it's interesting and challenging and it changes all the time i really like my job sometimes i feel like i'm good at it often i feel like i'm bad at it that's fine that's in some ways not the point but it changes and it's different and when i feel like i've gotten good at it usually something happens it just changes and then i feel bad at it again and i really like that dynamic in the beginning i had a lot more of a feeling of people think i can't do this i think i can and i'm gonna show them and i still have that even to the like you don't think that is gonna be 250 billion like let me show you i still have it but there's like less of a dark edge to it it's a little dark edge but like there's less of it it's oh cool we got here now we're just gonna see how far we can run in a way that feels a little bit more like fun and joyful so i did it it's not always joyful i don't mean that but it feels more oh cool let's see how far we can go with this and i think we can go pretty damn far whereas i think in the beginning i was more like you don't think i can get off starting line let me show you
Speaker 1your finance team isn't losing money on big mistakes it's leaking through a thousand tiny decisions nobody's watching ramp puts guardrails on spending before it happens real-time limits automatic rules zero firefighting try it at ramp.com slash invest as your business grows banta scales with you automating compliance and giving you a single source of truth for security and risk learn more at banta.com slash invest ridgeline offers one unified platform that automates away the complexity across portfolio accounting reconciliation reporting trading compliance and more all at scale schedule a demo at ridgeline.ai every investment firm is unique and generic ai chatbots don't understand your process. Rogo is built by finance professionals. It's connected to your data, learns your process, and quickly produces client-ready outputs. Check them out at rogo.com slash invest. The best AI and software companies from open AI to cursor to perplexity use WorkOS to become enterprise-ready overnight, not in months. Visit workos.com to skip the unglamorous infrastructure work and focus on your product. How surprised would the eight-year-old version of you be at some specific skill that you've developed in the way you described? It's like the most surprising one that you're now good at that old you would have said, no way?
Speaker 2I like go to market more than I ever would have guessed. You get to talk to like personable, friendly people all the time. And I was like a terrible public speaker. I would get the most nervous in front of my own team because I cared the most about what they thought about. And I was like, oh my God, I'm representing you. I want to do this so well. Exposure therapy was helpful on that one. You're like, you just do it and you do get better at it. But I think the like thought of being at kickoff or an all company get together in front of a thousand people on a stage. And I think I'd have been like, shit, like I'm going to be bad at that. And I think the people around me would have been like, yeah, she'll be bad at that. How much coaching can she get? It's like anything else. It's like, yeah, if you work hard at developing a skill, you tend to get better at it.
Speaker 1You just have to put in the work. In that one in particular, I'm very interested in that one. It just seems always high leverage. What matters? You've given however many hundreds of these things. What makes one good?
Speaker 2The trope of like, no one remember what you say, but they remember how you felt. It's so annoying, but it is so true. I do have to believe in the content. And if I just get up, I feel like it is content less. I will also feel that way. And it will be obvious to everyone. You kind of have to figure out your version of it, which for me, I try to put real content in and then also hold in my head. No one's going to remember any of
Speaker 1these facts. So that's not the hard matters more than mine. So much more. Yeah. And the key to good. Good heart is what
Speaker 2believing in it yourself, authenticity, one-on-one on a stage. People are pretty good at reading one another. When you feel like the person you're talking to is like going through the motions or doesn't really feel like it, or is misleading you. Maybe they're also misleading themselves. People can tell they can't entirely articulate what's happening. Something seems off versus someone who is authentically into it. Even if they're into something kooky, that just comes off.
Speaker 1What are the big trade-offs that you struggle with right now? You can't do everything. You've got to make decisions. The stakes are higher than ever. It's easier to build than ever. It seems like a cool time to be doing what you're doing, but there must be big trade-offs that you struggle with. What are those?
Speaker 2Yeah. I mean, one conversation I have had and have is we have tried over the last year to build in such an agent-forward way.
Speaker 1What does agent mean?
Speaker 2I don't know. You get two X revenue multiple if you say agent. It's like three X if you say harness. You can say harness more. Prompt file, like minus three X. We've tried to build such a great harness for our customers, but actually, and not build a bunch of SaaS UI. Oh, you aren't reporting? We'll have our agent go make charts for you on demand based on all our data. We're not going to put Tableau inside of Vanta, which is probably what we would have done in 2022. 2021, if we had been building at that. And we believe in this in like a short-term customer outcome sense, but also in a medium to long-term, like this is what software will look like. And no one is going to be putting Tableau inside their products.
Speaker 1So there's an aspect of this diffusion thing is just scary because maybe the tractor company takes 10 years. And in the meantime, you were right, but early and if we're wrong.
Speaker 2And if we're wrong, you're kind of betting on the time horizon there. The other version of this big enterprise is we're working with the. The US enterprise trying to close. And they basically were like, Hey, maybe we want your AI features. Maybe we won't, but can you turn them off for now? Why? The answer is because it's a way easier to get a non-AI tool through procurement.
Speaker 1And we want your. Turn it on after we're in.
Speaker 2Right. And like, we don't really have an off switch on, you know, you're like, Oh, did we go build that? But you're like, gross. We don't want to build that. Hopefully we don't have to use it. We'd so much rather take that time and effort and build something actually useful. Anyway, we're not going to build this off switch, but it's just one of those trade-offs.
Speaker 1If you were an investor, which you used to be, where would you be focused right now?
Speaker 2Oof. Do not envy the job at all right now.
Speaker 1Why? Why don't you envy it?
Speaker 2As much as I can critique and make fun of on the company side, the like, Oh, I think people are miss thinking about some of these businesses in a like very short term way. I think. I think that's the, the FOMO and what are your returns? I saw this tweet. If you haven't invested in a lab or an inference provider in the last four years, you should just shut down your firm. Cause like, what are you doing? It feels like more acute on the investor side than the company side. However hard I think my life is, my life's not hard to be clear. Whatever these trade-offs are that we're facing, it feels like more echo chambery, more judged on incremental returns and paper returns. Yeah. On the VC side and on the company side.
Speaker 1So what would you do? Where would you hunt?
Speaker 2The labs and the inference providers, apparently, no, those feel a little, well, we can debate whether it played out, but like high entry places. It feels like the discourse and kind of the certainty around the open source model providers, and then like the tooling and the companies around them feel sort of disconnected. It's, Oh, we've all decided the open source model will be very real. And then the ecosystem around them is so much less built out than the big labs. And that just feels off-topic. What do you mean by ecosystem around them? If you think that a lab, or is it long like, is that what it's called? Like these, we're basically just going to go deploy this technology and put AI in these businesses. Can you build one of those around the open source providers? Of course, yes. But can you really grab one of those models the way open AI is grabbing its own stuff and just replicate that playbook? Basically a bunch of the lab playbooks seems like they should apply to the open source models. Just let them mature.
Speaker 1And so there's more to do there.
Speaker 2Exactly. Yeah. Yeah.
Speaker 1What am I missing on that? I think it's just like a pace thing. Anything where these things can go, it's kind of like ironically private equity or something, what private equity promised to do, which was to shape businesses up. Now they can much more easily. And so probably everything will get way more efficient if it can. And the return will come from higher margin, more efficient operations, whatever. That's like an efficiency thing, not a generative thing. I guess what I'm more curious about, if you watch your peers and people around you, is where are the green shoots on the generative side? A bunch
Speaker 2of people starting security cyber companies, both because the environment and like I see proportionally more of those than other things. A bunch of people attacking rev tech, like go-to-market technology, which I think makes a ton of sense. Some of the old SaaS rev tech providers, they should be building all this stuff, but it doesn't seem like they are. And actually they're running more of PE bend spoon sort of playbooks, which is again, a choice. Like maybe a reasonable choice. Robotics is probably underplayed. Somewhat hot and hypey. That's not a novel area, but it's still definitely underweighted compared to all the software stuff. The models are also getting real damn good there to state the obvious. So probably spend time there.
Speaker 1What else do you feel like, you know, because of your unique path that others don't yet fully appreciate? Over
Speaker 2the past couple of years, Vanta has spent more time with government. I don't understand federal, state, local levels inside the US, outside the US. There is an appetite for modernization, big stated priority of the current US administration, but again exists outside of the US too. The AI pieces created more FOMO in government officials where they may have always known they did not have modern processes or modern software, but it feels more of an imperative now than it used to. There's something there is a broader answer. All of the conversation around AI and the technology has changed the priority and upped the priority of a lot of modernization. Sometimes it's within governments, sometimes it's within enterprises. You see this with actually a lot of the cyber stuff and the CISOs we talk to. Their jobs are changing because of AI. And they're saying, oh, given AI and like the risks from the agents, I would like to overhaul my enterprise risk program. And I would like budget for that. And I think if they said, I want budget for my enterprise risk program three years ago, people would be like, eh, we'll talk about an AOP. Maybe. And I think because of the attached to AI, they are much more likely to get that budget today. So there is more of a buying motion.
Speaker 1What would be your big pitch to come work at Vanta right now?
Speaker 2Oh, it's a fun stage. You get 16,000 customers using a product, using agents. When you ship things, they are in use by real people getting real feedback. Instantly. It has product market fit. You're just like going and experimenting with like fast iteration loops.
Speaker 1But early enough that you could still.
Speaker 2You can move. Yeah, yeah. We will let you move.
Speaker 1Yes. Because it's such an amazing Silicon Valley microcosm. Can you tell like the most detailed version of the billboard war story that you've ever told?
Speaker 2I was always very much a billboard skeptic because it seemed like who knows if they work. The tracking is terrible. Founder ego is why someone would do a billboard. It's like, because I feel. So cool because my company has a billboard. So I was always very anti billboard mid-summer 2021. disaster conference which felt like a big deal at the time like thank god we've almost beyond that our marketing team decided to try out of home i was like super skeptical it was like fine whatever try it and we were going to put something on the billboard and sarah who was our pmm at the time came up with compliance that doesn't suck too much pitched it to our head of marketing who didn't like it because we were like nagging our users and was basically like no don't think carter much nicer like than carter and sarah kind of believed in it and so she went to me which she usually does not she is not a like go around her boss person but like who really believed in compliance that doesn't suck too much and so took it to me and i read it and i like immediately left actually immediately texted andrew reed our investor as like what do you think you have good internet meme taste she loved it and so you're like okay let's try it let's run it yeah so i'm like what's the worst that's gonna happen people would think we're obnoxious and then probably forget in six months so we stand the billboard up somewhere like near burma game it goes over so well we tweeted the tweet goes viral the tweet then instead of the next couple months but like ends up on r slash accounting ends up on all the right you're like oh this is a gem and i think it really worked because like it's our brand at our best our marketing at the best our attribute is with a wink we take our work seriously but we don't always take ourselves seriously and so i think there was something to that that resonated it was a little obscure but it was sufficiently obscure where if you got it you felt like you got a secret anyway and so like compliance it doesn't suck too much just for 22 market crashes turns out there's a lot of billboard inventory available on 101 so we get this great spot where like 101 and 280 intersect and it's on the great spot for like not that much especially brought to its fact we joke and we're like oh yeah we've locked it up for years we were known for this billboard in this spot i think even on podcast i said the contract was locked up for years it was not locked up for years but that billboard got famous and so people would contact us and sarah all the time and be like how do you do billboards how do you do your billboards and we're like oh we work with this agency we work with this guy and so we referred this guy all of this business so we just be like it's him it's him it's him millions of dollars of business great turns out in the background we did not have a multi-year contract which i should have known certainly if i was gonna say that on a podcast not really do what it says on the tin and the contract was basically you've put the billboard up that's it this was like not a contract at all multiple years go by sarah's seeing one of her friends for dinner works at a startup and her friend was like oh it's so sad you guys gave up that billboard spot why'd you do that and sarah was like pardon and they're like oh yeah we just signed for your spot and sarah's like what we go back or like contract contract contract written in crayon there is no contract basically it's a placement order called the guy and he's like yeah you know it's a placement order they paid more so we like swapped it out underneath us i go to founder of said company and be like hello how much can i pay you and i am like an extremely inelastic buyer here like what can i pay you for this spot and he's like nothing and i'm like how about i double i think he was paying like a million and a half and you're like how about i give you three just get the spot and he's like we're actually cash flow positive so like literally i'm an inelastic seller and so we lost a spot
Speaker 1good punch line things
Speaker 2that made me think where i was like oh no vanta's screwed honestly losing that billboard i was like we did probably just lose a bit at a market card yeah yeah you're both bad omen there is some 5z market cap decrease that just happened here yes is there anything
Speaker 1i've missed that has your curiosity your attention that you think is really important right now you
Speaker 2see it in the data center conversations to some extent in the personal agent stuff it's like we just don't trust software companies tech companies the way we used to and that is getting worse year over year and it's kind of hard to imagine that inflecting back up and getting to the useful optimism of 15 years ago in that companies showing that they are trustworthy and industrial grade and secure through lots of metrics and actual definitions is more important than ever and will just get more and more important and again to a host of customers regulators lawmakers auditors etc vanta 250 billion is in the center of all of those transactions helping companies meet those high bars or wherever those bars are set and then conveying that helping them go convey that and accelerate their business
Speaker 1is another way of saying that like ai has ushered in this extremely high excitement but low trust yeah that's good era yes and vanta's job is preserve the excitement
Speaker 2but yeah increase the trust legitimately so not just on vibes
Speaker 1what will satisfy the market to trust again in a b2b
Speaker 2context businesses i do think there's a vibes piece but there's a very real data piece and i would like to see specific things or specific improvement curves or make promises with the market and i would like to see specific things or specific improvement curves or maybe contracts behind them that one's quote-unquote logical rational the way like enterprise markets often are i'm on the consumer side it is vibes that one seems very hard to turn i do not do you
Speaker 1trust them you use instinct etc big
Speaker 2companies now why not
Speaker 1it's not that there's
Speaker 2anything particularly interesting in my email or chats or whatever my life's not that interesting but i would rather just google or just apple or just insert company here have that information
Speaker 1what's security like five years from now like if you just wrap it up with like okay here's we're going and we want to be the person at the center of this yeah describe that state for security from
Speaker 2five years from now is faster even more intense more offensive hopefully in that yes we'll have more attacks but i think you need more white hat pushing back on all of that in just to get a speed that we haven't had i think you've got to get humans to get to that speed you've got to get some amount of the human decision making out or humans are like architecting systems and writing rules but not making every single decision it's like falling from that writing evals maybe that's all we're doing in the future we're all writing evals all day
Speaker 1long if you had to define what the next five years of vanta will be in one word what word do you
Speaker 2pick expansive i think we have this incredible base of customers of data and now we get to go build things on top of that eight years to get here we could go just build stuff on top of it for the next five or eight it's so cool that we did this
Speaker 1five years ago here we are again thanks so much for your time if you enjoyed this episode visit colossus.com you'll find every episode of this podcast complete with hand edited transcripts you can also subscribe to colossus our quarterly print digital and private audio publication featuring in-depth profiles of the founders investors and companies that we admire most learn more at colossus.com subscribe patrick o'shaughnessy
Speaker 3is the ceo of positive sum all opinions expressed by patrick and podcast guests are solely their own opinions and do not reflect the opinion of positive sum this podcast is for informational purposes only and should not be relied upon as a basis for investment decisions clients of positive may maintain positions in the securities discussed in this podcast to learn more visit psum.vc you know how small advantages compound over time that's true in
Speaker 1investing and just as true in how you run your company your spending system is your capital allocation strategy ramp makes it smarter by default better data better decisions better economics over time see how at ramp.com slash invest as your business grows vanta scales with you automating compliance and giving you a single source of truth for security and risk learn more at vanta.com slash invest the best ai and software companies from open ai to cursor to perplexity use work os to become enterprise ready overnight not in months visit work os.com to skip the unglamorous infrastructure work and focus on your product ridgeline is redefining asset management technology as a true partner not just a software vendor they've helped firms 5x and scale enabling faster growth smarter operations and a competitive edge visit ridgeline apps.com to see what they can unlock for your firm every investment firm is unique and generic ai doesn't understand your process rogo does it's an ai platform built specifically for wall street connected to your data understanding your process and producing real outputs check them out at rogo.ai slash invest
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