In this episode of Category Visionaries, we dive deep into the world of cybersecurity for small and medium-sized businesses with Kyle Hanslovan, CEO and co-founder of Huntress. From his unconventional journey from NSA hacker to startup founder, to Huntress’s impressive growth to protect over 100,000 SMBs, Kyle shares invaluable insights on go-to-market strategies, fundraising, and category creation.

Kyle’s candid discussion covers Huntress’s pivotal decision to partner with MSPs, their focus on total cost of ownership, and the power of data-backed conviction in the face of investor skepticism. Whether you’re a cybersecurity professional, a startup founder, or simply interested in innovative business strategies, this conversation offers a wealth of actionable advice and inspiring ideas.

Join us as we explore how Huntress is redefining cybersecurity for the 99% and learn from Kyle’s journey of building a $160 million funded company that’s challenging conventional wisdom at every turn.

Kyle
Yo, Brett, thanks for having me, bro. 

Brett
Not a problem, man. So, to kick things off, could we just start with a quick summary of who you are and a bit more about your background? 

Kyle
Yeah. So I always try to go with kind of the spiciest, fun stuff. So before Huntress, for ten plus years, I did offensive cyber operations. So, literally creating the implants, the exploits to get into networks, steal intelligence, and, you know, deliver valuable outcomes. Intelligence world, you could imagine valuable outcomes sometimes mean, like, sexy intel. Sometimes it means bombs on bad guys. So it’s a, you know, kind of a wild world to start and kind of pivot into startups from there. 

Brett
Was it hard making that shift? 

Kyle
Ooh, not hard leaving the government, that’s for sure. Really hard getting used to, like, this world where not everything was kind of like life limb, and you could chill a little bit. So that was a positive pivot. 

Brett
You seem so happy, and you’re so high energy. Were you always this high energy? Were you like that when you’re working in the government? 

Kyle
I was pretty ridiculous, Brett. I was. It was one of those things that, like, thankfully, you know, different parts and different, like, maybe if I was in the Marine Corps or something like that, they would have been like, listen here, jarhead, you’re not allowed to be that way. But the air force, we’re kind of known for, you know, chair forcing it up, and they kind of allow us to chill. So, yeah, I’ve always been this ridiculous. 

Brett
So I’ve talked to a lot of founders who come from the intelligence community, and one thing they shared with me was that they can’t talk about it. I had one founder on that. Yeah, I looked at their LinkedIn, and they looked to be about 40, and they had no job history at all. And I was preparing for the interview, and I almost didn’t want to take it because it almost felt like a scam. And then we did the call, and he explained to me, like, yeah, I have this whole career. I can’t talk about anything that I’ve done, but that’s just the way things are. Have you had that at all? Like, were there things that you did and things that you were part of that you can’t even reference and talk about? 

Kyle
I will. I will flat out say, yeah, of course, that either there was clandestine work or stuff that was classified, but I actually think most of it is folks drumming up hype. Yeah, sometimes I have to go back to the agency, to NSA and say, hey, can I get pre publication approval? But let’s be real. Like, none of us are that sexy. It’s not that clandestine. And I think some people just get used to you work in this world where you take operational security so serious and it kind of adds some allure and you run with it. I like to kind of break down that myth and just be myself. 

Brett
I mean, it definitely sounds badass, right? Someone’s asking you about your. Your previous work, and you say, I can’t talk about that. Or, let me. Let me clear with the NSA and get back to you. Sounds pretty badass. 

Kyle
Yeah, I would totally use that with, like, VC. Right? Oh, hey, I, you know, my deployments to Afghanistan, I, you know, tell you, but I’d have to kill you. But the reality is I was, like, somewhere in air conditioning behind a computer, so it just sounds sexier that way. 

Brett
What’s the biggest, like, misconception? Is it what you just described there? Or what do you think is, like, the biggest misconception about working intelligence? 

Kyle
Oh, that everybody’s created equally. One of my favorite, you know, comeback quotes, because a lot of founders are like, you know, I do military grade encryption, cut straight, you know, forged from the fires of the national, you know, security apparatus. And the reality is, like, there’s janitors there, too. So, like, even, like, you know, just like, startups have some folks that are meant to run, you know, the whole marathon, some people are supposed to burn out in the sprint. My favorite and kind of mantra is, like, dispelling, like, the difference between those that just kind of got by and those that really, like, made the mission happen. And so I’ll try to justify during this next little bit with your team here why I was not the janitor. 

Brett
Now, when you’re working intelligence for that ten year stretch there in the back of your mind, did you have this master plan of, I’m going to leave this someday and I’m going to go and be a tech founder. Where did that come from for you? 

Kyle
You know, I would love to say I think everybody always has an awesome story. They’re like, you know, as an kid, I had a lemonade stander, I pushed a lawnmower, and I had plenty of that hustle. I was broke, but for me, it was always about leveling up for my family. And I, like, I’m deceptively crusty. I’ve got kids that are 1917 and twelve. Most people have no clue that I have kids that old. And so for me, it was just about leveling up, like, life quality. So I was like, hey, I’m going to do this thing and the military will pay me for my college. Okay, I’ll do that. And then I was like, okay, let me pivot that to the next level. 

Kyle
And I finally got to the point where I was like, hey, if I want to make the next level of difference, I’m going to have to do this as a product because this whole, like, one off services thing, I can’t make a big enough difference. So I think there was some of that cool hustle mentality that I knew, but I didn’t know how I was going to do it, and I definitely didn’t know it was going to be like a product SaaS company, you have. 

Brett
A kid who’s 19. 

Kyle
I know, I know he’s him. And I was. 

Brett
When you had it, I thought you. I’m like 33, and I just assumed you and I were the same age. How old would you add? The kid? 

Kyle
I. No joke. I was weeks before I turned 19. So 18 years old in the service, living in England, had my first kid, so I got a lot of that life out of the way. And if you can imagine, like, I’ve built this whole startup while having three kids of this age. So it’s been a wild ride, but you can definitely do it if you truly understand, like, work life balance and not just what, like, people preach. 

Brett
I’ll be hitting you up for advice. My fiance and I just found out we’re expecting our first kid coming in May. So you gave me here. If you were pulling this off when you were 19 years old, then it makes me feel like, feel a little bit lame here. Complaining and feeling stressed out now. 

Kyle
Congrats on that. And you can totally do it again. It’s just going to be about your own self regulation. 

Brett
Yeah, makes a lot of sense. Now, when it comes to inspiration for you, are there any founders that come to mind and let’s skip the obvious ones, like Elon Musk, Jeff Bezos. Yeah, yeah. Like, we know everyone’s inspired by them a layer deeper. Who are some founders that have really inspired you along your journey? 

Kyle
I would say not so much on founders, but definitely business models like the team at Shopify and trying to say, like, look, instead of going for the biggest businesses in the world, how do I empower kind of the businesses that power most of the global economy? The SMBs, huge fan of the go to market model and some of the culture there with the Shopify team, there’s probably others, but I would actually say that was so one of the biggest ones. I know it’s cliche. The team at Basecamp, some of the books that they wrote early on about remote and rework, those two ones were really big about allowing me to challenge that you don’t have to be in the office. And that was like a pre Covid book for any of the listeners who haven’t heard it before or havent read it before. 

Kyle
So I would say those two ones are pretty big. 

Brett
Trey, were just talking about that in the pre interview of this idea of were both remote companies before it was acceptable to be a remote company. And our journey was we started the company, its an agency. So its just bootstrapped from nothing. And then after two years, I was like, okay, the next obvious thing is to get an office, because then you become a real company when you have an office. And a friend gave me the book remote and I read that and that completely changed my view when it comes to just business in general, but especially on the office. And I always think back to that. If I hadn’t been gifted that book, I would have, you know, signed this long term lease. I would have been stuck in San Diego and living the office life, which doesn’t sound very appealing. 

Brett
So huge fan of that. 

Kyle
You didn’t tell me earlier that was your. Your see how funny, right, as founders and some of the things that you can do just by sharing knowledge. What the ripple effect? Right. I think so many people think that their impact in the world is just the splash they make while doing it, and they don’t think about how they empower others to be that kind of ripple that goes all the way to the, you know, the edge of the lake. So that’s too funny. You and I both got inspiration in the same place. 

Brett
Absolutely. Yeah. The base camp guys, they’re really entertaining to watch. I think that they make a point of taking very controversial stands. There’s, you know, no secret there. I think that’s part of their playbook. I think Shopify also did something similar. Right? 

Kyle
So Tobias and team had several things that weren’t just about their go to market. It was about their, like, their feelings on culture. And so one of the ones that I enjoy the most that kind of, stuck with me. You know, not everybody has family. And so I really take a very hard stance where most, folks say, like, oh, it so and so company. We’re family. And you might feel that way, but, like, if you ever grow up, like, I’ll be just as brutally direct as possible. Like, I had a dad. Like, if you used to google my last name, you would find my brother and my dad’s mug shots. That’s the type of so think of, like, career, narcotics abuse, bad decision makers. 

Kyle
And it turns out if you’re going to use that word family, I would strongly suggest using the word chosen family. And that’s not just to be woke for the sake of woke. But the reality is the sports team analogies that Tobias used to use at Shopify of, like, look, Netflix has used some of those as well where they said, hey, we’re just a sports team. And the reality of, like, a sports team is somebody’s not playing well. Unlike your family, you cannot part ways with your family. Right? They’re there forever. But the difference is when you’re just trying to make a big difference, you need to be able to part ways with people that need to step up into their next position and need to step out into a different organization. So ill get off the soapbox there real quick. 

Kyle
But those are some of those big things that werent just business model that I pulled away from great founders. 

Brett
Trey, what about books? So outside of anything written from the Basecamp founders, the way wed like to frame this is to talk about Ryan Holiday. Im not sure if youre familiar with him, but hes a really interesting author, so he calls them Quickbooks. So Quickbook is a book that rocks you to your core. It really influences how you think about the world and how you approach life. Do any Quickbooks come to mind? 

Kyle
I do, but I have weird reasons. They’re my quickbooks. Like, the probably most obvious stereotypical one would be, you know, the, it starts with why everybody’s watched, you know, Simon Sinek’s, you know, Ted talks. Some of you have read the books, but I actually reread the book once a year, and I’m a big fan of abusing books. What I mean by that is I’m getting the highlighter out. I’m writing on every page, and if you went into my study in my office, I actually have seven versions. I’m eight years in. So coming up on the 8th one, and I reread that book, and I write about what the changes are and sometimes go down memory lane to see, like, how it talked to me different. So that one, to me, is important for very different reasons. 

Kyle
It’s been a little bit of a guideline, making sure that not only did I follow through with the why, that was really important to me in the beginning, but I allowed my why to adapt as I adapted, and that’s been a big one. Any chance you read that one? That one’s so stereotypical. But like I said, I kind of really abused that one, so I enjoyed that book a lot. 

Brett
Yep, I have read that. It’s a very impactful book, and it’s funny you mentioned that. I do the same thing. I went through a phase where I used to just, like, kind of read, like, every book I possibly could. And I sat there at one point, like, all right, this is getting out of control. There’s, like, a few books that have been very meaningful and have really changed my life. I’m just going to reread those over and over again. I think where we differ is on our strategies with where we highlight the books. So what I do is I have the same book, and then I go through with a different highlighter color every time. So I can compare that to the previous year to see, like, what I highlighted. You’re taking a different approach, right? 

Brett
You just buy a new copy of the book. 

Kyle
I do, yeah. And you’re right. That could actually be a pretty useful way of seeing, like, how did I compare and contrast from the years? I suppose after eight years, most of the book would be highlighted, or I’d be highlighting the same thing twice or three times for different reasons. But I don’t do enough of that kind of, you know, sometimes founders are probably most guilty of not making time to reflect and, like, do the retrospect. And I think the way you’re describing, at least for a two year increment, how did I do this year, and how do I feel about it now? That would be really nice. 

Brett
Yeah, it’s a lot of fun. 

Kyle
Some app out there that does this, like, on a Kindle or something, but, you know, I’m still old school. I read. When I do reading, I want to get away from my laptop. I want to go read something that’s paper. 

Brett
I. Yeah, I’m the same way. I can’t do kindle. I need to have, like, the physical book, and I need, you know, the physical gratification of, like, having it in my bookshelf afterwards. Like, what are you going to do to show people? Here’s my audible collection, or my Kindle collection. It just doesn’t have the same appeal. 

Kyle
I have many PDF’s. Admire them, please. 

Brett
Yeah, scroll through them. 

Kyle
So, yeah, that one. The other one that I enjoyed, especially as a nun, I mentioned I was coming from that services world. I’m hacking things for a living. I know nothing about product. And Guy Kawasaki’s art of the start 2.0 had just come out, and it was very relevant. Some of the biggest, I would say, kind of mantras that I latched onto, especially his ability to talk about analogies. So not just the sexy ten slide deck that everybody knows him for. There’s some amazing things about a founder dancing in a field by themselves that I really kind of latched onto those. I’ll save that to the reader to figure out what I’m talking about there. But those two are the ones that, again, quake books. I’ve read a lot of them, or I’ve read a lot of books. 

Kyle
Those are the two that kind of shift me to the core, and I keep rereading. 

Brett
Nice. Yeah, two great books. All right, let’s switch gears. Let’s dive deeper into the company. So how we like to frame this is. Let’s talk about the problem. So what problem is huntress solving? 

Kyle
Ooh, do you want to know it from the amateur 2015 brand new entrepreneur? Or do you want to hear, like, the sexier eight years later? 

Brett
Let’s start with 2015. 

Kyle
Oh, gosh, I was so daft. But I was like, look, I just want to wreck hackers that are out ruining businesses. And I’m a hacker myself, so I think I can do a better job at fine. It was so bad. It was not even a good elevator pitch. I did not know who the go to market was. And I just want to share that with the audience of, like, you can be very successful and for different reasons, attract folks, and it’s okay to not be crisp. I won’t. I’ll say it took me, like, four years to eventually get to what stuck at Huntress. 

Brett
What is it today? Give us the. The new, refined, pretty pitch. 

Kyle
I’ll give the four words first, and then I’ll give that refined, quick elevator pitch. It was just cybersecurity for the 99%. And that’s cute. Referring to the 99% of companies that fall below the enterprise. There is a poverty line that exists between enterprise and mid market SMB companies, and we’re for those folks that are the 99% that are usually ignored. I wouldn’t give the pitch that way, though. The reality is it doesn’t talk about value. It’s kind of not sexy enough. You kind of got to know what both cybersecurity and the 99% is. So it’s not great. But again, four years to get down to four distilled words, it takes a long time. The revised version of that probably sounds something much softer. Like, there’s a lot of great it talent out there, and there’s not a whole lot of amazing cybersecurity talent. 

Kyle
There is a gap. What if you could buy the expertise, you know, of cybersecurity rockstars for the price of a product, enabling your most junior technicians to be more efficient, and for those awesome cybersecurity folks that you have, hopefully retaining them and allowing them to focus on what matters most to your business. That pitch, what’s nice about it is it focuses on a core problem. It’s going to get that person to the point they say, oh, so you’re a product, and they. You’re really. The whole point of an elevator pitch is just to get them to ask, what do you mean? Do you want more? Can I take a meeting? So that would be the rendition. 

Brett
Did SMBs care about cybersecurity back when you started the company? I feel like there’s been a shift now where SMBs no longer think, okay, this is, like, a big company problem. No one’s going to target this little old manufacturing plant in Alabama, but I feel like that’s shifted. Is that accurate? 

Kyle
I listened to enough of these podcasts with you, Brett, that I’ll throw the hot take out there. I’m not so sure that the majority of SMBs still care, even in 2023, despite the news and everything. But in 2015, they did not care whatsoever. And so what I knew is, I knew there was a gap. I knew that hackers were wrecking them, but there is a huge educational gap. And so, as embarrassing as it sounds, my first, like, five or six calls were to these small businesses that were like, kyle, I really like your story, and I, you know, it’s cool that you are a hacker and all, but we don’t have any it. We outsource it. And I know everybody says, like, fail fast, fail often. I would actually challenge it. It’s better not to fail. 

Kyle
But this is not one of those cases where I follow that advice, I called five more SMBs and they were like, we outsource our it. And probably the fifth or 6th call, I finally called these people who actually do care about cybersecurity, who do have the budget, and that’s how I reach the SMBs. I go to market through the it outsourcers who often call themselves a managed service provider. 

Brett
Mm, interesting. So that’s your channel partner then, essentially, yeah. 

Kyle
Yeah, we’ve got about 4000 of those. And they bring us to about 110,000 of those SMBs. It’s not all of them, because as the SS become MS mid market companies, they start having their own qualified it team, qualified security team. And so there’s a little bit of both that plays in the mixed. But it turned out like cracking that nut and finding out who actually cares enough to pay a dollar for what you’re doing like that. By far, especially as a technical founder, you can obsess over your technology, but if you cannot figure out how to get somebody to part a buck from their wallet, like pack it up, you know you’re going to go out of business anyways. 

Brett
What was it like getting those early MSP’s on board with you then? 

Kyle
Gosh, you’re asking the questions that cut right to the bone. They weren’t beautiful either, because I was this cool hacker. I had just won like the World Series of hacking with my co founders and I. So I had some real street cred that it people liked. And so that got me in the door. So I guess if I was giving advice to the audience, I’d say, find your superpower and make sure you can articulate it to get that good meeting. But I ended up pitching my first handful of customers and was like, I will work for free one day a week in your office to learn more about MSP’s. And I did that for probably the first two and a half years just to learn, because again, I was this enterprise guy. Cybersecurity for the government at the highest levels of government. 

Kyle
I didn’t know anything about a 30 employee company that was doing like, CPA work and turned out working and spending that time while also learning from some of like the Airbnb founders who were doing stuff that didn’t scale. Some of those examples are like the earlier rooms that were sold. They weren’t very clean. The pictures were terrible. They were going in there and doing things that didn’t scale. Cleaning the rooms, taking good pictures, helping them with their listing. And by me doing that time with the MSP’s, I learned a lot about the market. I learned how to listen to feedback, and I learned the real reason why people wanted to separate a dollar. I also validated the size of my addressable market. So I guess I’m concluding that as it was a fail in the sense that I had to do that. 

Kyle
But without that, for me and my background, I there’s no way we’d be where we are. 

Brett
Did you have any pushback early on with that thesis of really serving the 99%? 

Kyle
So were headquartered in Baltimore. So, one, we didn’t even have, like, you know, real, like, great VC. And so not only did I hear that from the, you know, limited VC we had in the mid Atlantic area, when I came out to the Beltway or out of the Beltway and ended, like, the Bay Area, every single meeting was, I like the approach. Let me show you how to take it to enterprise. And I was like, whoa, youre missing the opportunity. Most people forget Walmart. Walmarts, the Fortune one. Theyre not Fortune 100. Literally fortune one, because they go after this long tail of the market. Trey. And so I actually had to be very strategic at who I could get money from, because most people that wanted to take my money required us pivoting completely away from the mission that we wanted to support. 

Kyle
And so from the Angels to the series A all the way, believe it or not, into series B was the first time I got conviction for SMB. So that is five years in, people did not believe in my go to market. Wow. 

Brett
How did you see through that? What was that, like, five years where people didn’t believe in your go to market? 

Kyle
You know, I don’t think you got to go as crazy as Elon and only support yourself. You know, you don’t got to go as crazy as Kanye and kind of fall into your own echo chamber, but you got to have something slightly wrong with you to be told over and over. I think the cool cats would call that conviction. Id probably make it a little bit spicier and say somethings got to be slightly effed up for you to have that conviction. But I had the data points. It wasnt just blind conviction. I had the people telling me the stories, people showing. I had the data that I was building from the bottom up on saying, look, this is how big the total addressable market is. That kept me going. 

Kyle
But I still had to have how I proved people, by the way, that the SMB was worthwhile. The market didnt change for me. I had to show them that, look, Im at 10 million in ARR and then I could finally get real movement. So you can imagine that was a. 

Brett
Long time being an entrepreneur, especially in tech. I think its glamorized a lot. Preston, whats the lowest point that you reached so far in building the company? 

Kyle
Trey founders, I would say all the founders ive talked to that have gone from early stage all the way through IPO. So were talking multi billion dollar companies. We all joke about one thing, which is the roller coaster of you are on your high one day and the very next day youre in the dumps. I would say there was one time where my co founders and I just literally looked at each other and were like, hey, I think we should sell this company for $30 million. That was our magic number. And were out. We were done. And even a couple times as co founders, weve had to support system each other where one co founder is like, I’m burnt, I can’t do this anymore. And you kind of gotta, like, I know some people do, like single founding companies. 

Kyle
I personally couldn’t do it and wouldn’t recommend it to anybody. Two, maybe three. That’s the sweet spot. And so when you ask about low spots, wanting to sell your startup that you’re passionate about or just feeling burnt yourself, that’s how low it’s gotten. And I would say that probably happened the burnout side probably three times in eight years. So it’s real. 

Brett
What do you do when you’re starting to feel burnout? 

Kyle
Ooh, don’t work. Turns out just a simple, like vacation or rotate back on your family. My kids play soccer. So getting involved in that type of thing, finding something or really what really got me out of it is my family could never quite understand the stress and the loneliness you go through as the CEO. But if you can find other CEO founders, especially ones that are a little bit later stage than you, it normalizes and kind of re energizes or at minimum puts it into perspective. So for me, I would obviously say take care of your life, but if you dont have good founders that are kind of two to three years ahead of you, I personally wouldnt have been able to make it. 

Brett
Trey, have you ever wished that you moved to Silicon Valley and had that founder network here? Because there are just a lot of founders, theres a lot of VC’s, theres an ecosystem here, and youre not in Silicon Valley. Have you ever considered it? 

Kyle
My first five years, that was literally Chris, John and I, my two co founders, and I said one of us has probably got to move out there, one of us has got to do it. And it turned out now that I’m, you know, we’re eight years in, I’ve been able to get around it by just making four visits a year. And it is a non optional meaning. I go out there for like Saster. I go out for other places that I know there’s going to be quality founders. I also go out to hang out with just the venture capitalists. Like, nobody wants to put money in you when they’re just getting to know you. A good example of this is like the series C. I raised $60 million. 

Kyle
I didn’t even build a series C deck because I had such solid relationships and had been sharing data for so long because I had been going out there once a quarter for like three or four years. So I would say now that I’ve learned it, I know you don’t have to go and move to Silicon Valley, especially now that Silicon Valley has had a bit of an exodus in some places, too. But I think if you’re not visiting it, you’re going to give yourself a disadvantage that I don’t think you should take. 

Brett
Makes a lot of sense when it comes to your market category. How do you think about your market category? I introduced you as a managed security platform. I think I stole that from somewhere on the website. But what’s the market category? 

Kyle
So a lot of people love to say, you know, I’m the whatever of Uber or like Uber. If I had to use that example, there’s a really great enterprise company that does a good job at selling many security products called Crowdstrike. They’re great founders, great technology. I would have to, if I was doing it all over. I would say, oh, I’m the crowdstrike of the SMB. But it turns out that sometimes that people immediately, when you call out that great company, they would ask, well, why can’t Crowdstrike do what you do? So if I had to overcome that objection, or I was just being cognizant of it, I would say, look, there’s three words in what I do. Managed security platform. The one that differentiates huntress is how we deliver the cost of our humans at the price of a product. 

Kyle
So the word that’s important is managed. We build all of our own intellectual property. We do all kinds of amazing things at Huntress, but how we deliver that at great gross margins for any early founder, especially if you’re talking to VC, they want to know how you can scale. And so if you’re not aware of how to keep those kind of net dollar retention, gross retention and gross margins under control in that top quartile or top decile. And that, for us, had allowed us to continue scaling. And that’s a weird thing as a technical founder. So I’ll stop there. But that’s how I would address it. 

Brett
What’s the competitive landscape look like today? 

Kyle
So in 2015, it didn’t exist. Today, everybody wants to be a managed security platform of the SMB. You literally have the greatest enterprise players from above coming down. You have some of these incumbent smaller players from the bottom coming up, and then you’ve got unrelated companies that do just traditional it management trying to come over. So it is becoming hyper competitive. But because of the moat we carved out in the beginning, knowing our mission, getting our name out there, we’re able to withstand that pressure. And so for the first time, I would say in eight years, where my biggest competition was just education and awareness, I’m now facing, like, real heavy competition from every angle. I turn it and it turns out the market’s big enough if you have truly a big tam. 

Kyle
Some of these key players, like Crowdstrike, who since their amazing 2019 IPO, they’ve been saying they’re going to come to the SMB. I run into them in 1000 deals in a month. I run into them five times. That just shows how big, if you get a truly large, total addressable market, there’s plenty enough for everybody to win. 

Brett
What are you doing to win? How are you attracting customers? How are you rising above all this noise? 

Kyle
So I had to get better at saying this, but I’m actually pretty stoked you asked me that question again. Im a hardcore kernel developer, exploit developer. I slang code my whole career but all the answers if you notice this back half, ive been given revenue and finance terms and it turns out the finance geeks they would call the reason I win lowest total cost of ownership. That just literally means even though my product isnt the cheapest, if you combine the cost of acquisition plus the cost of the operations or humans to manage it, plus that opportunity that you could be doing other things and those three things into TCO or total cost ownership. I am the lowest total cost of ownership and we just disproportionately win our deals. Crush it that way. 

Kyle
I didnt know, by the way Brad, that was the reason were going to win. It just became very obvious as we got further. So I hope that doesnt like if youre early stage focus on how youre getting repetitive deals. This is something though, is any of the audience whos going from series a to series b, especially in this world where now profitability or at least efficient growth is being considered. If you dont have some strong awareness of this, youre going to have a harder time raising those later rounds of capital. 

Brett
Trey, where did you learn about this idea of TCO? Ive never even heard of that before. 

Kyle
Gosh. It turns out, I guess if you go and get a proper MBA and all those other things, this is just like, it’s just like, yeah, a basic thing. Clearly, if you can tell coming from a military service background, the ability to execute and get the job done was way more important to me and I clearly skipped that class. But I learned that total cost of ownership by again meeting with other great entrepreneurs and people a little bit further ahead on the journey. So as I started looking at IPO and the amazing opportunity to ring the bell one day, I had to start talking to people like CFO’s and chief revenue officers and much more mature investors who care so much about those type of unit economics. 

Kyle
And when they would ask me these things and I kind of was just looking like an idiot, I would just admit, yo, I’m a cool hacker, but I don’t know, can you explain like, I’m five and it turns out people really appreciate that humility and will go above and beyond to make sure that you don’t ever have to look that goofy again. So I just embraced the idea of just asking anytime I didn’t know. And people have been able to help me get a lot further ahead. 

Brett
As a tech founder, you mentioned ringing the bell there. Is that a big milestone that you’re. 

Kyle
Excited about and working towards, well, two answers to this. One, like, the public market is rough right now. So I think we’ve seen with the great companies like Instacart, I think Birkenstock literally, you know, had a recent IPO arm, had one as well. It’s not the sexiest market to go in there, but the reason that is so important to me is if you’re trying to become a truly iconic company of consequence, and that’s, you know, Huntress, that’s been our whole thing. That’s great validation. And so for me, I don’t actually care so much if I ring the bell, but having the option to ring the bell because I grew so far, made such a big difference and can become this enduring company that’s going to make a difference. 

Kyle
That, to me, and that optionality has always been the most important because it means I took good care of my clients, I took good care of my technology, and stayed ahead of hackers. So the ringing the bell is symbolic for what it truly stands for, which is I’m disrupting hackers and protecting the 99%. So it is what it is. But yeah, I’m chasing it. I’m chasing that opportunity. 

Brett
How has your platform had to evolve? Or I guess, how is it going to have to evolve with AI and everything that’s happening? From my conversations with other cybersecurity founders, they say that AI could potentially change everything. And being in the arms of these black hat hackers, it’s going to be very dangerous for businesses. How are you thinking about adapting the platform to prepare for this next wave of assaults? I guess you could say, yeah, I’ll. 

Kyle
Caveat that I, although I come from a data science background, I am not an AI expert. However, you cannot be a founder in this days and not get spun up enough on, like, how to implement or take advantage of these new cool technologies. What I am, though, an expert at, is automation, and AI is largely a great form of that. And so what we’re seeing is, one, you can do amazing, great things with the current iterations of AI to augment people and kind of democratize. You can literally take junior people and have them perform as much more elegant, sophisticated operators or technicians or security folks. You can also use those same skills and level up script kiddies that become much more sophisticated hackers. So it cuts both ways, is where I’m going. 

Kyle
For us internally, the thing that we’ve found is we found very few cases where AI truly replaces, but many cases where it augments. So you can imagine, on my end, as I’m considering efficiency, I’m having to bat away some of the crazy questions of like, can AI just ruin all this? And I’m like, look, my Tesla drive tries to kill me eight times a day with its AI. It’s not perfect, but what it can do is it makes my distracted self way better at driving. And that’s kind of what we’re seeing with both our team and other combating technologies. So you could imagine hackers have a very tight feedback loop. Theyre always looking for a new way to iterate and get better. And so for us, were looking at that and saying, how are they going to leverage this tech? 

Kyle
How can we get ahead of it? And really, how can this help us scale better and that efficiency? I think, at least here in this timeframe, 2023, 2024, this is a perfect use of AI in that case. So thats what were doing with it. 

Brett
As I mentioned in the intro, you’ve raised nearly 160 million to date. What have you learned about fundraising throughout this journey? 

Kyle
It’s storytelling. Plus amazing unit economics. And for any early stage founder, the unit economics are largely discounted. You have to prove that, yes, your claims are possible, but I have always, especially coming out of an intelligence background where you have, you get rewarded for accuracy. There is some really interesting things about Silicon Valley and valuations that because I pitched so accurate of what I was going to be able to do, like, ill be very direct. I said I was going to hit 1.5 million in revenue one year, and then I said I was going to hit five and I ended up doing 5.3 and then I said I was going to do ten and I hit ten and then I said I would do 20 and I did 20. Nobody rewarded me for that accuracy. 

Kyle
They actually, in their minds, were discounting because they hear so many flamboyant, amazing stories that they internally discount, you cant do. So I just want founders to be aware of that because I think in many cases, my actual valuations and dilution took a little bit of a hit because I was so adamant about what I was doing. I will caveat though, that by the time I showed people so many times I could do what I would say I did, its made the later stage of raising capital much easier. So if I could give advice to anybody else, raising capital would become a phenomenal storyteller. Make sure that you tell the full potential of just how big your idea can be. Dont limit yourself with whats reasonable, but tell them this is the full capability. 

Kyle
But I would also say, bring that humility and caveat and say, even though this is the full potential, I think because of execution we could look something closer to that. And what youve done is youve given them the high, youve set them to the point of where you think your valuation or what you think the opportunity is, and then youve given them that. Hey, I know youre going to discount me and I think the discount needs to be in this range, and that hurts. As a founder. Now, when Im looking at what thats worth, its probably worth over $100 million in different places. Ive taken more dilution because my pitch wasnt as crisp as it couldve been. 

Brett
How does that feel, saying that out loud, $100 million potentially lost. Does that hurt you? Does that hurt your brain at all? Or are you just numb to it now? 

Kyle
As somebody who grew up, broke, its all gravy at this point. Im sure somebody out there, some super privileged person, would say, oh, you should be clawing that back and you should be upset. Im all for you deserve to get what you deserve at the end of the day. But if you have that problem, you have such a first world problem that take your crocodile tears somewhere else. What im more worried about are founders who lose 33% of their company in their first series day instead of 25 because that has a big ripple effect on how your cap table looks in the future. So that’s that message, series a and kind of all the seed rounds that come before. That’s the folks I would really worry about. What you do at your cap table. 

Brett
And how you pitch outside of fundraising. Let’s imagine you were starting the company again today from scratch. Based on everything that you’ve learned so far, what would be your number one piece of advice to yourself? 

Kyle
Gosh, that’s such a big question. The number one thing would be, I didn’t suffer from imposter syndrome a whole lot. I was always very confident, you know, maybe even like slightly borderline cocky, and that got me through. But I thought everybody was like me. I thought everybody didn’t suffer the same. And I think I’ve discounted a lot of some of my best teammates ability to deal with imposter syndrome. For those not familiar, that’s just the idea of even though they’re really great, they might believe that they don’t have a seat at the table. And as a founder, your voice is a megaphone. They literally, they, meaning even your co founders, your board, your teammates, for sure, they will listen to the smallest inkling and find reasons to find fear. 

Kyle
And they will listen to the smallest compliment and use it for rocket fuel as motivation. And if I would have thought about that a little bit better, I can think a couple places that putting a little extra effort into giving those compliments and making sure people know that theyre doing good and helping them get out of their head space, that could have probably made some consequential difference in eight years. So I know thats an atypical type thing, but thats something I couldve controlled. Theres a lot of things I couldnt have controlled, and thats the reason I would have, you know, spent more time helping people, you know, deal with kind of some of their imposter syndrome. 

Brett
Final question, since I know were way over on time here, lets zoom out three to five years into the future, whats the big picture vision? 

Kyle
Yeah. So if huntress is lucky enough and we ring that bell the way we said, my favorite question people ask is, what does an IPO mean to me? And I remind them that when it comes to protecting, you know, the SMB, the 99% of companies, the IPO would be just the beginning. So five years into it, I’m probably looking at, all right, I see a billion dollars in ARR coming. How do I get to 2 billion? And what I’m really saying under the hood there, that’s what finance people want to hear. What SMBs want to hear is, all right, great. You’re protecting 300 or 400,000 of us SMBs. How do you protect the 34 million that are in the US alone, let alone the, you know, hundreds of millions across the globe? So I’m looking forward. 

Brett
Amazing. Kyle. It’s been such a fun conversation. I’ve really enjoyed it. I know it’s going to be a hit with our audience. Before we wrap up, if anyone wants to just follow along with your company building journey, where should they go? 

Kyle
Yeah, so I am super active on both. I think they call it x these days. And on LinkedIn, I just try to make sure that I actually communicate. And I’m pretty savage when it comes down to, like, giving advice of skipping the b’s in the middle and just giving it, you know, direct. So that’s where you can find me, the companies, of course, on all social media platforms. 

Brett
Amazing. Kyle, thank you so much for taking the time. Really appreciate it. 

Kyle
All right, brother. Thank you so much, Brett, for having me.