The following interview is a conversation we had with Justin Beals, CEO, Co-Founder of Strike Graph, on our podcast Category Visionaries. You can view the full episode here: $12M Raised to Build the Future of Automated Security and Compliance
Justin Beals
Thanks for having me on, Brett. I’m excited to talk.
Brett
Yeah, no problem. So before we begin talking about what you’re building at Strike Graph, let’s start with a quick summary of who you are and a bit more about your background.
Justin Beals
Yeah, sure. I’m the CEO and Co-Founder of Stripegraph. I think from a background perspective, I’m a serial entrepreneur. Mostly I’m involved on the technical side. So VP of Product. A Chief Technology Officer. I started out my career in software engineering, web application development, and moved over to the business side over time.
Brett
Amazing. And two questions we’d like to ask just to better understand what makes you tick as a Founder and as an entrepreneur, what CEO do you admire the most and who is it and why?
Justin Beals
So I read that you like this question, and I have a little bit of an off ball answer. I don’t know that I have a single CEO that I desperately look up to. Not that there aren’t great ones. But I think when I think about organizations that I try to emulate or just the culture and impact that they’ve had, I really think about Nintendo. I think about the resilience and longevity. It’s century old company. They’ve been building amazing games since they started, and they’ve survived these massive shifts in technology, from playing cards to video consoles, video game consoles. And so I really look up to kind of the constant innovation, the impact they’ve had, and their ability to build on all that. They’ve learned to be really powerful force in the marketplace.
Brett
It’s the first time someone said Nintendo, but I’m happy someone did, because it’s such a cool company to think about. I always remember exactly where I was when I was, like, five and the Nintendo 64 came out and I was like, whoa, this is game changing. How can they get graphics to be this good?
Justin Beals
Yeah, absolutely. And I think as you get to study the history of them a little bit, you realize that they’re just gobbling up a relationship with consumers in a really valuable way, where the consumers always look at them in a heartfelt perspective. Yeah.
Brett
And why do you think that is? That Nintendo doesn’t seem to get a lot of attention? Maybe it does, and I’m just missing it, but I feel like I study tech a lot. I study entrepreneurship a lot. And Nintendo seems like one of those companies that everyone knows is massive, but it seems like not a lot of people talk about them. Why do you think that it would be?
Justin Beals
They’re probably not as splashy on the outside. Maybe that resonates with me. They don’t need to make a massive splash. They want to build an amazing product and with a product to succeed in the marketplace because it’s the better product. And maybe something that we could look at, that we try to emulate in the tech space, is something like product led growth. You could probably see Nintendo as a pioneer in that realm.
Brett
Super interesting insight. Now, what about books? Is there a specific book that’s had a major impact on you? And this could be a business book, or it could just be a personal book that’s influenced how you view the world?
Justin Beals
Yeah, Brett, I am not a big fan of business books. I don’t read very many, but a long time ago, when I was just starting to build companies a couple of years out of college, I read a book called how to Start a Record Label, and that was, of course, the type of business I was trying to start at the time. And they had a really great piece of advice. They said, Always act like the company you want to be. And so one of my first companies I built, we bootstrapped it as a sole owner. But I tagged all my emails as partner just so that people would imagine that maybe there was more than one partner than just me at the organization. So that’s the business book that’s had the biggest impact on my life.
Brett
I love that you’re coming out strong. The first two answers are two answers we’ve not heard before, so appreciate the uniqueness of the interview already.
Justin Beals
That’s great. Brett. Yeah, I think one thing that I am constantly reading and consuming is science and history information. And I think that’s just I have a passion for it. But I also think it puts me in a mode of innovation and thinking about what can be built and what is possible, which is, of course, what every startup is doing. Right. We’re operating on the fringe of what business has done before and trying to create a new opportunity for our investors, our employees, and our customers.
Brett
And to zoom in on the comment you made about history, is there a specific period of time or a period of time in history that you really are studying now or just really fascinated by?
Justin Beals
Yeah, I just wrapped up a lot of interest in deep geology. I think there’s an interesting story being told about not just one supercontinent in the Earth’s history, but multiple supercontinents. And we’re starting to find geological evidence for that. And it’s very mind blowing to imagine that the continents have split apart and come back together over the hundreds of millions of years that the Earth has been around. And then lately I’m kind of eyeball deep in Egyptian history because it’s the anniversary of Tutankhamen find and so there’s a lot of interesting articles coming out about it lately.
Brett
Nice. Is there like, one book that you can think of on Egyptian history that’s worth reading or good to read?
Justin Beals
Not on Egyptian history, but I have a really good history book that I definitely think is worth reading. The name of the book is 1491, and the book is about the population characteristics of the Americas prior to Columbus arriving. And some of the more recent archaeology pushes forward a theory that the population size was massive, much bigger than we thought it would be, and that the effect of disease on the Americas may have killed as many as 80% of that population. And so it is a little bit of a shift on our understanding of who was here already and kind of also what was happening during colonization and what people were experiencing and seeing.
Brett
Nice that sounds like a good read. I’m very burnt out on business books. I feel like now they just say the same thing over and over again with a different cover on it. So very refreshing to hear some new book ideas here.
Justin Beals
I’m glad, Brett. And look, if you need to learn about business, books are a good place to go. I think after you spend enough time in the trenches, you’re right. The themes are very well known, and mostly what you’re focused on is making sure that what you know to be true about business is being applied in an effective way.
Brett
Yeah, someone tweeted something about that the other day and it’s like it’s not necessarily like access to information. Most people have that now and they know what they need to do. It’s more the execution and what you do with that information. And that’s where people struggle. So it’s not like another book is going to solve the problem. It’s just execute on what you already know.
Justin Beals
That’s the art of what we do. Right. Bread. It’s not in the knowing the skill, but in balancing all the effect of applying that skill, whether it being a CEO, a Founder, an engineer, or a fine artist, right?
Brett
Yes, absolutely. Now something else I’d love to ask you about. Let’s talk about your journey going from being an engineer on the technical side and I think you mentioned CTO to the business side and eventually being CEO of Stripegraph. What was that transition like for you and what were some of the challenges you faced along the way? And just anything you can share there, because I think it’s going to be really interesting to our listeners because a lot of them are founders who are transitioning from technical roles to being CEO and being founders of companies.
Justin Beals
Yeah, I was really interested in doing it fairly early on in my career as an engineer, but I didn’t have access to capital. And I think the first company I founded that found success was we founded that company in about 2000. And what I was really looking for was honestly a cultural environment. I was looking for to build a company that had a culture that allowed for a sense of creativity in the work, that really appreciated human beings for being more whole than just filling a job description and hopefully found some really exciting impact to have in the broader marketplace and community. And so I think I went from being an engineer to seeing what was the easiest type of company to build at the time that I had the resources to, which was a services business. And so I founded Roundbox Global in 2000.
Justin Beals
And between 2000 and 2009, we grew our company to 130 consultants globally. And I was the sole owner. We never took on any venture capital. We were doing about 10 million in revenue annually when we found a good buyer for the business. And it was kind of my MBA, brett that was the school of hard knocks. Making sure customers renewed, finding great talent, getting them on good teams, sourcing good products, investing in the company in the right places so it could grow. And I would say that I just put my mind to it a little bit. I literally just jumped in with both feet and then kind of suffered. What happened? I don’t know that’s the best advice for any tech entrepreneur. I will say this big lesson learned is that if your expertise is on the technology side, if you’re a great engineer, a CTO, someone with an awesome idea that knows how to build it, what you need to bring along in partnership is someone that knows how to sell software and market software.
Justin Beals
And notice that I also said the word partnership there because I really believe today that it’s not a good idea to be a sole Founder. It’s very painful for that person emotionally. Sure, you get to make all the decisions, but that’s also a danger unto itself because you make wrong assumptions really easily. And if you’re that inventor, that engineer inventor, what you’re looking for is someone that can take that idea and encapsulate it in such a way that people are going to pay money for it. This is not just building a product. It’s making that product sustainable through a really viable business.
Brett
Makes a lot of sense. And that resonates a lot. And that’s something that I hear from a lot of founders, right, is the Founder journey is lonely. So if you’re the Founder on your own and you have no one there who’s in the trenches side by side with you, it can be very lonely in a very sad place.
Justin Beals
Yeah. All the worst problems roll right up to the top, right. The one that folks may not want to solve on their own or they’re struggling with it. So it does feel all day long like you’ve got a little hammered for really intractable issues that are tough. And having a Co-Founder, a partner in the business, leaning on your board as critical mentors and advisors is exactly how you should build that team. Love it.
Brett
Another transition I want to ask about is the transition from a services business to a tech company and playing the venture capital game, which sounds like you’re building based on the 12 million raised. Has that been a difficult transition for you to navigate? Because it’s two very different styles of business, right?
Justin Beals
Yeah. Building the product has not been tough because in between building a services business and founding Strykegraph, I acted as a CTO or as a product lead for a number of startups. And so I did build up some skills around how do we deliver a great product to the marketplace, how do we listen to what the marketplace is asking for. What I’ve been challenged with in the transition, what has been new to me is certainly understand the mathematics of venture capital investing and what to prioritize from an optimization perspective, getting the board involved, finding the right board members, building an investor community, and finding the right investors. I actually was nervous about that, but have found it very enjoyable, and I think I’m just lucky. I’ve had great introductions to really amazing people that have had a great influence on our success. So we saw that as very exciting work.
Justin Beals
I definitely did.
Brett
Nice. Very cool. Now let’s finally talk about Strike Graph and dive deeper there. So can you start with just telling us the origin story behind the company?
Justin Beals
Yeah. So I was a CTO at a company here in Seattle, Washington area. We had an AI product. We would predict the likelihood that a job applicant would be a high performer. And it was a great product. We were getting a lot of interest from buyers, and to get the most powerful predictions, we need to get the most amount of data at a higher quality. And so our ideal customer profile was like a Fortune 50 type business. And we got a lot of interest. We’re getting verbal commitments to buy. But then it was taking a year and a half to get through the procurement process. And what were finding is that about nine months of the time was spent in this security review because they were sharing really sensitive data with us. And this was the first time as a CTO I’d ever heard of something like a Suck Two audit or an ISO 27,001 certification.
Justin Beals
I’d always implemented good security, but I’ve never had a buyer ask us to certify that security practice. And so it’s tough on the company, on growing it quickly. When you can’t grow a company quickly, it’s difficult to attract new investors. And we eventually had to find a buyer, and I’m really glad we found a great buyer. And the product sterile really thrives with their management. But the problem stuck with me. How do we get really efficient trust with our buyers that we can close these deals much more quickly? It also dawned on me that now security is a sales asset. And that was never the perspective that security had in any business I’d ever worked. It was always a cost center. It was always something we wanted to minimize. It was always this nagging feeling that you think is keeping you from success. And to have this opportunity to treat security practices as a sales asset, to certify companies so that they can facilitate business more quickly.
Justin Beals
I thought it was a great problem space, massive market, huge value. Really not difficult engineering to solve the problem for. So that’s what led me to try and dive into this area.
Brett
And this could be a dumb question. I’m sure it is, but SoC Two compliance? I see that at the bottom of websites. I see all the companies announcing that they’ve achieved it. Who’s behind sock two compliance. Like, who’s doing those authorizations in the first place? What does that group look like that’s doing this?
Justin Beals
Yeah. So to have a valid SoC Two audit performed with a real report, it requires an expert in security testing and a certified public accountant. So I just want to qualify because this is a little bit of a confusing space. As you pointed out, Brett, being compliant with Sock Two means that you might self assess. You might say, I believe that I am compliant with Sock Two. You might say, I bought this piece of software that tells me that I’m compliant with Sock Two, but I haven’t really been tested for it. And the problem with that is, what’s going to happen is you’re going to get to a really important buyer, you’re going to have a big contract on the line. And they’re like, no, I’m looking for the actual audit from a CPA. Not looking for you to just self assess your ability to be compliant, and then you’re behind the eight ball, because now you got to go through this whole testing process.
Justin Beals
And so what Strykegraph really provides and we help our customers receive, is literally being compliant with Sock New. So let’s get a good security posture in place. Let’s design the security that matters for your business. Let’s distribute that activity amongst your organization, and let’s collect evidence automatically so that we prove that you’re doing the security. We then do the testing to the SoC Two standard, and we work with independent certified public accountants to provide the final Attestation. That is the gold standard report that you want to hand over to a buyer or procurement department to see say to them, we have been independently assessed on the SoC Two standard and passed the assessment.
Brett
That makes a lot of sense. And I have to guess that this is really non negotiable. Right. There must be a huge portion of enterprise organizations that won’t buy from a company that doesn’t have sock two compliance. Is that accurate?
Justin Beals
Almost all of them. It is such a pervasive requirement, and that is what has expanded this marketplace so quickly. When I first learned about this, you could kind of get around the edges a little bit and maybe get in there and try and get them to say yes, but not anymore. Our customers tell us it’s do not pass go. Without this particular audit accomplished, you will not receive a contract. It will be very difficult to operate in the marketplace.
Brett
And then what’s the time savings that you’re offering to your customers? How long does it take to get to compliance if they’re using Strike Graph versus if they were to do it on their own or to hire someone else to do it?
Justin Beals
Yeah. Typically in the past, what someone would do is they would hire a consultant to help them kind of spend time designing that security posture, teaching someone how to operate it, and then kind of hand collecting these screenshots or emails or calendar invites or pieces of evidence from your cybersecurity practices that would prove that you operated it. So Strykegraph has essentially eliminated any need for consulting to do that initial process. So we’ve taken down what might have been a three to six month timeline to a week or two at most, just to get your security posture out the door. Typically, to go through an audit, you want to collect between 30 days and six months of that first amount of evidence, the receipts that you turned everything on you said you would, that you have the policies in place that you said you would, and then it can go right into audit.
Justin Beals
And the testing phase for us is very automated. We’ve been investing a lot in the technology to make that very efficient. So it’s really just a couple of weeks before a report can be turned around and you have the sales asset ready to go. Wow.
Brett
And how do these consultants view companies like Strike Graph? Because it sounds like you’re, in a way, eating their lunch right. And you’re taking up the customer base that they have and automating it with a platform. So are there consultants who are hostile and reject the idea that this can be done via a platform?
Justin Beals
Yeah, we see that a fair bit. And honestly, the people that struggle the most are the audit firms, which have been the teams that were the most consultative in practice in their business model. I get that they don’t like it takes away their intelligent impact that they might have. The problem is that it’s not that big of a problem. There’s certainly some decision making to be made about what the right security posture is, but it does not take a deep expert. And that’s one of the really neat things about our platform is that we guide our customers through exactly what you need to implement from a security posture based upon the risks you identify for us. And the machines that we provide are so intelligent that they make the recommendations that a consultant might have made. I think also what we’re starting to do, not starting to do, I’ve been delivering on, is really the testing as well.
Justin Beals
And it’s that testing portion when it comes from technology that I think has an independence and transparency that you can’t get from a consultant. And we’ve seen this in a lot of industries where technology brings a sense of independence and transparency to the certification or the analysis that you can’t get from just an opinion from an individual. I don’t know what to say about it. This is a change that’s happening. It’s like the tide is shifting. Strykegrove’s mission is really just to help accelerate that and bring those types of innovations to customers doorstep.
Brett
And is there a sweet spot for you in terms of adoption? Is it startups that are like Seed or Series A or what does that look like in terms of where you’re seeing the most adoption?
Justin Beals
Yeah, so I’ll start at the most broadest category, then we could drill into where we like to focus, really. We help customers along the entire journey, so we have customers as small as five or six employees that are just getting started, that know that they need to achieve one of these certifications, and we’re able to help them get through it quite quickly. We also have customers that have thousands of employees that are using strikecraft to get multiple certifications. And we really piece together one technology to drive through that journey over years with a customer as they mature and grow. Our sweet spot has been companies that are 50 employees, and sometimes, I think, the smallest of organizations. They’re really looking for a magic wand. What we say is that we can’t operate your security for you. You need to do that. And we want the certificates and reports that you get to be ethically validated so that they carry the weight of trust that you want in the marketplace.
Justin Beals
It doesn’t do us any good to cheat the system, so to speak. That’s not what we’re in the business of doing. And so it does help to have someone that’s a little mature in the role of driving security to work with us. And we find that at that 50 employee floor, they hire someone for it.
Brett
And how many different certificates are available on the platform today?
Justin Beals
Yeah, so today we’re doing Sock two, ISO 27,001, and then early next year, we’re spinning out our HIPAA and GDPR certifications as well across the platform. We support a number of different standards as well, the ones that I’ve mentioned, but also things like PCI, DSS, the CMMC standard, which is the Department of Defense standard, and then we also just did the NIST 853 standard as well, the National Institute of Science and Technology. Now, each of these standards can sometimes have slightly different assessment methodologies. And what I would say is that 90% of companies, all they need really is that initial sock two. But then when you decide you want to go into the health tech space, we’re going to do HIPAA Two. Then if you’re really starting to focus on Europe, then you might want to do ISO 27,001. So you can see these stages right, where we’re an early startup, we’re doing sock two.
Justin Beals
We’re hitting about 100 employees. We may think about another vertical and another standard that we want to utilize. And then as you’re growing 200 or globally, you’re going to start adding in the ones for the other geographies that you’re starting to operate in.
Brett
And when it comes to these standards, what’s that lifecycle look like? So who comes up with the standards? Who decides that they’re going to be the standards for the market? And then is that regulatory that requires them to be followed or does just become embraced by the industry and that just becomes what’s expected if you’re going to work in that space?
Justin Beals
Yeah, really. The buyers, the procurement departments, the people that manage third party risk at companies, they have coalesced around standards that they support. And we’re seeing a lot of commonality across all the buyers. I will say that certain verticals will have the buyers in that vertical will have a certain standard that they’re looking for. And so certainly as you’re adding on a vertical like healthcare or health tech, you’re going to see HIPAA pop up. Right now, the authors of the standards are different. A lot of different groups have done it. I think the biggest group that we think of when we think about standards bodies and defining standards is the ISO body. And they not only ISO 27,001, they have a slew of other standards that they’ve written for everything from manufacturing to biosciences. The suck two standard was written by the AICPA. So that’s the group that represents certified Public accountants, and it’s built on top of what they understand from a financial audit process perspective, looking at security processes.
Justin Beals
And so that’s where that one comes from. But then you have ones like HIPAA, that’s a law, and it certainly has a regulatory impact. But if you can get that certification and independent assessment to the HIPAA law, then now you have a sales asset. And so the buyers are looking for those types of sales assets.
Brett
Got it. Okay, that makes a lot of sense. And then is it like continuous compliance? Do they need to reassess these every year, every six months, or every couple of years? Does it just depend on the standards?
Justin Beals
Definitely, standards can drive how often an assessment or audit must be performed. But there’s some pretty broad truisms about how it kind of works. The first is that all of them expect that you are operating the security posture throughout the year and that’s why you’re using Strycraft some is that you say, yeah, these are all the security practices we’re doing. And throughout the year, Strycraft is collecting the evidence to prove that we did those security habits. So that’s really important. It’s like you don’t want to go into financial audit missing June and July’s bank records and your ledger. The financial auditor might not really like that. And the same for something like a security audit. You really have to have that proof throughout the year of what you’re doing now. You have to once a year, you need to get the audit accomplished and that is where the testing happens and the report is produced that throughout the prior year you have been operating those security practices.
Justin Beals
So it’s an ongoing thing. And then there is a point in time where the assessment is done and you receive your renewed certificate. And then as you go throughout the selling year, you can reuse that certificate for as many customers as you want. Got it.
Brett
So that would answer the question then on the business model side. So it’s still reoccurring revenue then every year, I’m guessing.
Justin Beals
Yeah, we’re annual reoccurring revenue. It’s annual subscription. We have a really nice way of bringing a single price for the certificate outcome that you want to achieve. So if you’re looking for a sock two, we have a bundle price, everything’s included. And it’s just a very efficient relationship between Strykegraph and you to making sure you get that sales asset accomplished that you wanted to achieve.
Brett
And I know we talked about the time savings there, but what about the cost savings? So let’s just talk about sock Two compliance. What’s that rough price with you? And then what would they be paying if they were hiring a consultant to do it? Just to understand that comparison.
Justin Beals
Yeah. So consultants, we’ve seen consultant prices for the entire design of your security posture, implementing that security posture and going through the audit, upwards of 50 to delivers all of that solution. The audit, the preparation, the management of your security posture, really for usually 17 to 20K.
Brett
Wow. So that’s huge savings then.
Justin Beals
Some big savings. I think from another huge savings from a time perspective is that since you’re only dealing with us, a more typical relationship would be, hey, we have a technology vendor that we’re kind of storing some data on around compliance. And then we have a consultant that’s helping us and we have an auditor and we have a penetration testing team. So we have these three or four vendor relationships that I have to coordinate to get this one thing accomplished. And that’s not the way it works with Strykegraph. We’re able to provide all of that solution through our organization.
Brett
And how do you think about market categories? Is the market category security. Compliance or what’s your market category?
Justin Beals
Yeah, I think the broadest market category that we think of as non financial audits, a non financial audit is usually a process audit or assessment. And that’s essentially what our customers want to buy. They want to buy an ISO 27,001 audit or a SoC Two audit or a HIPAA certification, and that’s what we deliver now to get them there effectively. We have a lot of technology that helps them organize and implement the security needed to be efficient and collect all that data. And the main reason we’re collecting that data is that once we get it in our system, we can really easily apply technology driven testing. Got it.
Brett
And then are you working with firms like Gartner or Forrester to really be part of that category conversation or what’s your view on creating categories with analysts?
Justin Beals
Well, we’ve had to, I think, look, one of the mistakes I made at Strike Graph is we should have been in G Two a lot earlier than were the second I found at the company, I should have started setting up our G Two profile. But we operate in multiple categories when we work with analysts like that. So some people will approach us as a constant compliance or a cloud compliance solution. Some people will approach us, perceiving us, as almost like an audit and certification firm because that at the end of the day is what they’re trying to buy. And some people look at us as like security orchestration. So I’m trying to find a tool that will help me organize my team around security, the tasks they need to do, and the evidence we need to provide. To me, it’s like trying to say that an album is only one category of music.
Justin Beals
They probably have a ton of influences, they’re trying to solve a couple of different problems. And similarly, we think by combining what was piecemeal technology from multiple categories, we have a much better customer relationship, much tighter on the value prop, and therefore we see really good retention and customer upsell. Opportunity.
Brett
So do you envision this as a category creation play at some point then, where all of these different fragmented categories will be combined together into one super category that you own? Or do you view it as the super category isn’t really relevant.
Justin Beals
I think it could become a super category. I think we are pushing the leading edge of what you should expect from a vendor in this place, and so there’ll probably be some creation around it. But I get the tension that Gartner and these other teams must feel. It’s like they don’t want to fragment the marketplace even more because categories help them drive vendor selection. But nobody wants to in such a vibrant technology opportunity, you really just can’t wait to say, hey, we live in a category. You need to really lean in and be like, how do we solve the customer’s problem? And so I think it’s a push pull. We’re probably constantly going to be balancing it. And the thing that I don’t want to do necessarily, Brett, is it takes a lot of energy to invent a category. So I think I’m perfectly happy just popping up in everybody else’s.
Brett
I like that perspective. A lot of people come on, they talk about creating a category, and I think they don’t realize that it’s very hard, very expensive, and it takes a long time and you’re going to lose a lot of the low hanging fruit deals by just accepting that you’re part of someone else’s category. So I appreciate, again, the unique perspective that you’re bringing to the show.
Justin Beals
Thanks, Brad.
Brett
And one question on G Two, how critical has that been for your growth? Are we talking like 5% of sales maybe come from that or start from there or like 50%? What does that look like?
Justin Beals
I would say it’s 10% or less of our opportunities come through something like G Two. But what has been really powerful is that instead of having in the sales motion to do a lot of customer references, we can actually point them at all the great reviews that we have on our G Two page. And so that’s made the sales cycle much more efficient.
Brett
And what’s the typical sales cycle look like for you? Is that something that’s a decision that’s made within weeks or months?
Justin Beals
Weeks, yeah. The average is 30 days or less. Really? It’s been amazing. Now, I’ve definitely had other products where we had long sales cycles, year and a half year, especially when we see big enterprise deals. That takes some time. But when you talk about creating a market category versus operating in a space where people are already setting aside budget, know that they need to solve a problem and trying to solve that problem, that’s the difference, right? Like, we don’t need to educate our customers on the fact that they need to solve this. Their buyers are telling them that they need to solve it. And so they’re coming to us saying, I’ve set aside budget and know I need to buy a solution. I’m looking for the best solution in the marketplace. And then they look at Strykegraph and they’re like, this is really the product I would want to buy.
Justin Beals
And so that’s how we win the deal.
Brett
Well, you guys are in a dream position, it sounds like, because you don’t need to make the case to customers for why now? And I think that’s what a lot of the startups that are out there today and just a lot of the founders that I interview, they’re constantly facing that challenge, right, where they have to convince the market that they need to solve a problem that they maybe didn’t even realize they had or didn’t realize was a solvable problem. So for you’re in a dream position, right. The market is telling them that they need you they need a solution like yours, and then they start looking for one.
Justin Beals
Yeah. Now, there is one downside to this, and that is that there is more competition in the marketplace. It’s had a longer time. Like compliances and software used in compliance solutions have been around since the first spreadsheet, probably. So that’s one of the things that especially in talking when I talk to investors that we have to discuss quite a bit, is that this is a massive marketplace. There are competitors in it, but that’s okay. When you have a great product, you’re really hitting the metrics that you want.
Brett
And what are you doing to stand out against such an aggressive, competitive landscape? I’ve seen a few vendors that I don’t know if their product is as good as yours or does exactly what you do, but they’re definitely trying to solve the same problem. And I’ve seen a few of them raise at least last year, they did. They raised Fu money, no better way to describe it. And I see their billboards all over San Francisco, and they’re definitely deploying that cash. So how are you competing with these startups that have raised big money?
Justin Beals
Yeah, first is on the product. So the major differentiation is that we deliver the certification. We’re not just an API collector into your cloud environment for our expected evidence that we think your auditor might want. We close the loop on exactly what you want to buy. And that’s really important in the sales motion from a differentiator you’re coming to us not as a piece of technology that makes up compliance, but the solution to my compliance problems. I think that with that strength of product and strength of discussion, we certainly haven’t had the cash resources to buy the billboards, but in every place where we’re competing, we’re winning the deals we want. And that’s allowed us to also really craft a better product. Market fit. One of the things I like to say about our particular marketplace is that if you took the old adage of you hit a million dollars in recurring revenue and you have product market fit, you could be sorely mistaken.
Justin Beals
Because people are so desperate to solve this problem that you could get a million in arr on what is just literally problem market fit. Not a real solution. And you’re incredibly vulnerable because you’ve raised at a massive valuation that you will likely never live up to. And you’re deploying cash at an incredible rate of speed. You’re still only an 18 month runway on hundreds of millions of dollars type of raise. And so to me, it’s not how I like to build businesses in some way. Brett we can build a great product. We can be a market winner. We can achieve everything that our competitors have, and we won’t put the marketplace at risk, we won’t put our customers at risk, won’t put our employees at risk, and we definitely won’t put our investors at risk.
Brett
Very insightful. It’s so relevant today, I think, too, because I think a lot of these companies that did raise the Fu Money last year are now going to be in a lot of trouble when they go to the next round. And I think a lot of the companies that were competing with these Fu Money startups were sweating it last year as they were battling it out, but now they seem to be calming down a bit and seeing the opportunity. And it sounds like that’s definitely the case for you as well.
Justin Beals
Yeah, we’re still growing really quickly. We’ve been clicking right along exactly where we want. I’m really proud. From a traction perspective, we’re well over 200 customers at this point. We’re kind of regularly hitting three X types of multiples, and we have a really exciting two to five year journey here as we really revolutionize with technology the actual testing to these standards, and I think that disruption is going to be a ton of fun to deliver to the marketplace.
Brett
I love it. Last question here for you. I know we’re up on time. If we zoom out into the future, let’s talk about that journey. What’s the three year vision for the company? What’s it going to look like?
Justin Beals
Yeah, I think from a three year vision for a company, we would definitely like to see a triple double type of situation for us from a growth perspective. So it is a lot about growth. We feel like we have an amazing product. We’re seeing that type of growth today. And to hit some of those growth, what we’re actually focused on is less about just adding teammates to the team, but really optimizing the impact each of us has as teammates. In some ways, it seems harder, but I also think that it is the right type of motion to get the company to scale. And in the next three to five years, we want to be ready for a great Series C fundraiser, series D type fundraise that allows us to really carve out a massive part of this marketplace.
Brett
Amazing. Well, that’s an exciting vision and this has been so much fun. So thank you so much for taking the time to chat before we wrap up, if people want to follow along with your journey as you continue to build, where’s the best place for them to go?
Justin Beals
Yeah, Strykegraph.com is a great website if you’re interested in solving for these compliance problems. We have a ton of information on there and it’s really easy to schedule a demo with one of our amazing account execs. It’s really awesome. We promise that we try and make those really useful from an opportunity to learn about your compliance initiative and what you’re trying to achieve and give you some critical information about how to be successful at it. And if you’re interested in me, the social media that I hang out on is LinkedIn, which means I’m turning into a business guy, Brett. Maybe I should read more of the books. And I’ve been using mastodon lately as well for kind of a little more public social media presence.
Brett
Amazing. Justin, thank you again for taking the time. This has been a blast. And look forward to seeing you execute on this vision.
Justin Beals
Thanks so much for spending the time with me, Brett, it’s great to meet you and connect with your audience.
Brett
Let’s keep in touch. Our.
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