The following interview is a conversation we had with Ryan Schonfeld, CEO of Hivewatch, on our podcast Category Visionaries. You can view the full episode here: $25 Million Raised to Build the OS of Physical Security.

 

Ryan Schonfeld
Yeah, thanks for having me, Brett. Yeah. 

Brett
So before we begin talking about what you’re building, let’s start with a quick summary of who you are and a bit more about your background. 

Ryan Schonfeld
Sure. Ryan Schoenfeld I’m kind of a weird background for Tech Founder because I started my career as a police officer. I was a police officer and detective on the East Coast that always kind of had this idea of frustration around technology being behind and law enforcement being a very antiquated industry. We were always kind of chasing the bad people and they were always ahead of us. So I went and got my master’s in It system design and got into computer crimes. And from then on, most of my career through law enforcement and transition to the private sector has focused on digitization of antiquated spaces from law enforcement and eventually corporate security. Worked in Fortune 500 running global security programs, had a security consulting firm and basically found this problem that existed across all of these companies, sort of regardless of a vertical size stage, which was inefficiency and how corporate security programs scaled and how they made sense of this vast amount of data that they needed to perform their mission, which is keeping people safe. 

Ryan Schonfeld
And so building a software platform which is called Hive Watch to help address that for organizations is the path to where we are. 

Brett
Nice. I think you’re our first guest who has been a police officer, so you’re the first. 

Ryan Schonfeld
I’d be pleasantly surprised if there was others. 

Brett
Yeah, that’s not a typical career path, I’d guess, from a police officer to Founder. 

Ryan Schonfeld
Yeah, it’s always fun during the fundraising process and talking to investors, and a lot of people like to talk about their atypical journey to getting where they are. And I like to think mine is truly atypical. 

Brett
Yeah, it certainly sounds that way. Now, two quick questions that we like to ask just to better understand what makes you tick as a Founder. So is there a Founder or CEO that you look up to the most right now and you’re really following? 

Ryan Schonfeld
I wouldn’t say that there’s one that I particularly follow right now, but over time, as were sort of ideating and coming up with everything and then particularly during COVID as COVID started and evolved. Watching how different founders responded and reacted to the events and if they had to perform layoffs and how they did that and how they treated their people. And Brian Chesky of Airbnb is one that has kind of always stood out to me in a very positive way. Not just in sort of the brilliant business that they’ve built, but the way in which when COVID hit and their business had some initial challenges, how they treated their people kind of always stood out to me in a very positive way. 

Brett
Nice I love that. And what about books? Is there a specific book that’s had the greatest impact on you as a Founder? And it doesn’t have to be a business book. It could also be a personal book that’s influenced just how you think and how you act and how you behave. 

Ryan Schonfeld
I’m going to give you a tech answer to the question and it’s a podcast, not a book. And this was early on in COVID when I was kicking myself and wondering if I was an idiot for starting a company in the midst of this pandemic that was starting. How I Built this was a podcast that I think I listened to every episode and hearing sort of the early stage things that founders went through, like, you know, them when they’re big household name companies. But just hearing across the board that the struggles that founders had early on in their journeys and almost how universal a lot of those struggles were for different founders was immensely helpful for me in the process as were overcoming a lot of those early challenges as well. 

Brett
Nice yeah. Guy Raz is, I think, one of the best podcast hosts that exist, especially in tech. He was one of the early podcasts that I listened to as well. Did you ever listen to the one about the Southwest Founder? 

Ryan Schonfeld
Yes. 

Brett
Such a good one. 

Ryan Schonfeld
Southwest JetBlue, almost every one of them is amazing. 

Brett
Totally. Nice well, that’s super helpful. And you have better understanding you. Let’s talk now a bit more about the company. So can you give us just the quick, high level overview of what you guys do and really what that pitch is to the customers that you serve? Sure. 

Ryan Schonfeld
So Hive Watch is an orchestration platform and we also like to describe ourselves as the operating system for physical security. And what that means is in the corporate physical security world, the mission is to protect people. People are the most important asset for an organization. There’s also protecting businesses and intellectual property. But how organizations go about that traditionally leverages a lot of very legacy and disparate technology that’s disjointed it doesn’t communicate with each other. And so over time, these programs have grown and grown. And the way in which they make sense of all of this information is by throwing more people at the problem to do manual analysis. And so Hive Watch is a platform, it’s software. There’s no hardware component to what we do and sits on top of organizations existing infrastructure. Ingests all the data gives a single operating picture for the security department, but also does noise reduction and streamlining of process. 

Ryan Schonfeld
So there’s a high percentage of false alarms, for example, that come in through companies and their access control systems. It’s one of the leading drivers of what makes a security program inefficient. And so one of the things that Hive Watch does is what we call noise reduction on those systems. 

Brett
Got it. And who is the market that you’re targeting? Who are the customers? 

Ryan Schonfeld
So pretty vertical agnostic. We haven’t started doing work in the federal government space yet intentionally. I think it’s a stage of company that you get to where you’re ready for that and we’ve just chosen not to be ready for that yet. But otherwise pretty agnostic. Size of company. There’s really no upper bound in terms of how big a company can be. The bigger the company, generally, the more they need something like this. At the bottom end of the market is probably companies that are about 1000 employees and up is generally where we see pretty good traction. 

Brett
And do you find it hard to convince them to buy technology? Are they typically open to technology or what’s their view? 

Ryan Schonfeld
It’s evolving. Generally people are open to technology. I think there’s a pretty good understanding that technology is necessary. I certainly think that COVID and distributed workforce has sped the adoption of that, particularly in corporate security, which if you look at a typical enterprise company, corporate security is probably substantially behind the rest of the organization with regard to technology adoption, shift to cloud, things like that. So it’s kind of a known need. The question is, what does future of work look like for that organization? The thing that we do know is that the problem we’re solving inefficient security programs, false alarms, things like that, is pretty much universally a challenge for these companies. 

Brett
Got it. And what kind of traction have you seen so far that you’re okay with sharing? 

Ryan Schonfeld
Yeah, I mean, we don’t talk about revenue, but our product is in market. We have come out of our early release date that’s commercially available and good traction with early customers and procurement with a bunch of new customers. One of the cool things about our product is the speed to deployment, which helps us with traction and moving quickly. So to give you some numbers, the legacy products in our space have an average 14 month deployment cycle. And so one of the North Stars for Hive Watch is that an organization should be able to get us up and operational within 30 days. 

Brett
Wow. Very cool. And when it comes to market categories, what are your thoughts there? Is this a new category that you’re creating or are you redefining an existing one? 

Ryan Schonfeld
It’s kind of a combination. So I mean, what we’re doing. We’re calling security. Fusion platform. The legacy product in the space is called a PSIM. It’s physical security Information management system, about a 15 year old piece of tech, in some ways conceptually similar in that it consolidates, assuming it’s working correctly, consolidates disparate systems into a common operating picture. But I think our approach and how we’re doing it, our go to market and the evolution of the product, remembering that we’re a series, a company, the product that’s on the market today is nowhere near the product that’s going to be there in three, 6912 months and beyond. And knowing the direction that we have planned for the product, I think it becomes pretty category defining. But today, if I’m being totally honest, it’s evolving the current category because our industry just hasn’t had the ability to do something like this historically. 

Brett
Got it. And what was that acronym again for the category? 

Ryan Schonfeld
PSIM. 

Brett
PSIM, got it. So do buyers today go to Gartner and say, I need a PSIM platform, and then they get their recommendations from there? Does Gartner influence the buying cycle here or what does that typically look like? 

Ryan Schonfeld
Not really. Gartner and most of those generally don’t have a huge amount of data on the physical security space. That’s changed a bit over the last few years, and we’re starting to see some analyst firms with a focus on it. But in physical security, what you’ll find is PSIM is literally and figuratively a four letter word. It’s not something that most organizations want. It’s something that a lot of organizations have spent millions of dollars on over the last decade plus and not gotten much ROI. And so one of the main reasons we don’t really want to be associated with the market category is it’s kind of a dirty word because it, as a category hasn’t delivered on its promises. 

Brett
Makes sense. We have a client who’s in the SIM category, or I guess they don’t want to be in the SIM category, but they’re in kind of this similar situation where the market understands SIM, the market buys SIM. So even though they don’t consider themselves a SIM, they still have to basically use that for now with this master down the road, they’ll get rid of it. But it’s always, I think, a trade off. In the early days of deciding, do you really try to go out there and create something from scratch or just anchor yourself with what’s already there? 

Ryan Schonfeld
Yeah, I mean, there’s still companies that go out and look for and Google PSIM, but by and large, that’s not how our category is buying. So I’m not super concerned with the name of the category, but that is sort of legacy approach, what people are used to looking at. 

Brett
And how do you see your customers buying? What’s that typical process look like for them? 

Ryan Schonfeld
Well, that’s another challenge that the security industry has seen for a long time, is that buying has been driven by a complex distribution channel wherein the end user really has very little relationship with the manufacturer of the product. So you’ve got manufacturers and distribution and value added resellers and system integrators. And by the time the product actually touches the customer’s hands, number one, it’s seen I don’t even know how many markups, but number two, the support available to the customer is restricted to the people within that channel. And generally, manufacturer won’t support the customer directly. Our feeling is that our product is a critical piece of software that is in real time helping protect people and our customers. 24/7 so our approach is the customer needs to be supported directly by us. They need to be supported around the clock because they’re working around the clock. 

Ryan Schonfeld
And so one of the things that we’ve really been doing is first and foremost a very customer driven approach to how we go to market and pretty customer obsessed in the entire experience. From the sales process through implementation all of the customer support. We have a customer advisory team which is consultants that they would ordinarily have to pay a lot of money for in the industry that can help figure out the best way to adopt the product and implement it with their program and then partnering with other consultants in the industry to help the customers figure out the best way to build their programs, to implement the tech and leverage it. Because at the end of the day, organizations should be able to save a lot of money by streamlining their programs and being more efficient. But they need to figure out a way to do that without reducing the quality of the service they’re providing. 

Brett
Makes a lot of sense. And with cybersecurity, funding has obviously been booming the last few years. Are you seeing the same thing with physical security? What’s that ecosystem look like today? 

Ryan Schonfeld
It’s evolving quickly and then also the current market is probably changing that a little bit. But when we raised our seed round almost two years ago, almost every VC we talked to didn’t have a thesis on the physical security space and really just didn’t understand it. And security to them was cybersecurity. Fast forward to last October ish when we did our Series A going back, it was a much quicker process. Obviously the market was hot. But all these firms from looking at the growth of companies like Vercata for example, in the physical security space, all of a sudden these major VC firms had a thesis on physical security and we’re actively looking at investments in the space which excites me. I think that physical security is a space that just has not evolved in a long time. It’s a very sleepy but very important industry. 

Ryan Schonfeld
And so seeing investor money coming into the space now excites me because there’s just so much opportunity to do great things in this market and it’s a huge market and have there been any. 

Brett
Big tech unicorns that have come out of physical security in the last few years. 

Ryan Schonfeld
I mean, the latest big one that people are talking about is Burcata. I think they just did a three and a half billion dollar round valuation in the VSAs and camera space. So that’s probably the one that most people are talking about. But there’s been, I’m trying to think there’s flock Security or Flock Safety, I think is an A 16 Z company. There’s been a few other pretty big ones that have grown very quickly, gotten very quick traction and adoption, and pretty just outsized sales performance relative to how the space has historically performed. 

Brett
Got it. Very nice. Cool. Next question for you. So, as I’m sure you know, bringing an idea to market is never easy. What would you say has been your greatest challenge and how did you overcome that challenge? 

Ryan Schonfeld
Well, I’m pretty technical as far as the physical security industry, but in terms of being a tech Founder, I’m considered a non technical Founder. I can’t write code, I’ve never written software. I think I took one coding class as part of my Master’s and I was horrible at it. So one of the challenges is you can have the best idea in the world, but how you go about executing that and how you build the right team around you to build the product, build the company, build a culture. Like a lot of startup founders, this is the first time for a lot of us. And so making sure that we have great advisors and the right investors, not just taking money from people who are willing to write a check, but people who have been there and are strong advisors, add value to the core team. 

Ryan Schonfeld
I think getting from concept to an actual MVP product that works in our environment and then seeing it go live in a customer environment for the first time and it working there. Those were probably the two biggest hurdles, but also the most exciting things when they actually happened. 

Brett
Nice. And last couple of questions for you. What excites you most about the work you get to do every day? 

Ryan Schonfeld
Well, our people would be number one. Our company’s grown really fast, so we’ve gone from 25 people at the end of last year to 65 plus people this year. And so one we just have. I know I’m biased here, but an unbelievable team of not just very professionally talented people, but just really good people. Everybody talks about the great culture of the company, so I won’t use too much meme language, but anybody who works here, I think it kind of speaks for itself. And we have almost no turnover in the business. Very happy employees. We like each other. And in an industry that historically has failed at diversity and bringing in new people and perspectives, I’d also argue that Hive Watches is one of the most diverse companies in our industry. 

Brett
And are you guys remote or is everyone working there in the office in La. 

Ryan Schonfeld
It’s a mix, so we have an office in La. The people who are in La. Are hybrid, but we do have employees in 14 or 15 other states as well who are fully remote. But we do, even with fully remote employees, get together in person periodically for collaboration, and they don’t come here just to come sit in the office. There’s cross functional events for teams and interdepartmental things for teams to work together when we get people together. 

Brett
Nice. And if we zoom out into the future, what’s the five year vision for. 

Ryan Schonfeld
The company world domination? I think we’re in an industry where there’s a lot of opportunity to define a category like we talked about earlier. For us, in that time frame, we’d like to be a market leader and a company where security teams looking at software should have a reason to go look at a product other than Hive Watch. 

Brett
Nice. I love it. Unfortunately, that’s all we’re going to have time to cover for today before we wrap up. If people want to follow along with your journey, where’s the best place for them to go? 

Ryan Schonfeld
LinkedIn is where I’m most active. And if you want to learn about Hive Watch, it’s Hivewatch.com. 

Brett
Amazing. Well, this has been a blast. This has been a really fun conversation, and I’ve really enjoyed it. So thanks so much for the time, and I look forward to seeing you execute on this vision. 

Ryan Schonfeld
Thanks, Brett. 

Brett
All right, keep in touch. You our.