Todd McKinnon is the founder and CEO of Okta, a $25 billion publicly traded software company that you may never have heard of, but it solves one of the most annoying 21st century problems: having to remember all of your various log-ins and passwords. Thousands of companies use Okta Identity Cloud to manage access and authentication for their employees. This episode takes you on Todd’s entrepreneurial journey, from the Powerpoint deck he presented to his wife (subtitle: “Why I’m not crazy” for quitting my job at Salesforce) to the initial product idea (with a name that sounded “like a French perfume”) to successfully completing an IPO.
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Highlights from this episode:
PeopleSoft was an amazing company…it made a big impression on me, both from just the power of technology and what it could do for our customers. And I think the biggest thing about PeopleSoft at the time was, it had a very distinct culture, and the culture was all around the people in the employees and making the employees feel like it was their company.
One of the ways I had a sense that Okta would be a good market and a good product was building that security technology at PeopleSoft and the login and single sign-on there and integrating that system with directory services…I got an early glimpse into the power of good technology and around identity and security.
Is anyone really going to want to rent software? Is software as a service really going to survive? Are you really gonna want to trust your customer data to some small company? And then through the course of those interviews [at Salesforce], it became very clear to me that, you know, the company not only was surviving, but it was really thriving.
I was able to talk my way into getting the management job [at Salesforce]…I convinced him that you can’t keep 13 engineers, you’re going to scale this engineering team. So hire me, and I’ll help you. I’ll manage the team. And I’ll help you scale this thing out to many hundreds of people that you’re going to need for the ambitions of the company over the next 5-10 years to keep up with the sales growth.
My advice is, hire people with experience managing and leading that have an open mind on how to continuously improve things, and don’t try to measure it. I think all of these — I know that sounds counterintuitive — but all of these efforts to quantify innovation and software development and engineering are, I think, at best flawed, at worst, downright harmful.
Embrace this mindset of continuous improvement, iterate, look at what you’re doing and how you’re doing, and resist the temptation to quantify it.
The first thing that struck me was how simple the products were…but that was the magic of Salesforce at the time, and the magic of cloud computing.
If I see someone’s that talented and really wants to work for Okta, even if we don’t have an exact fit for them, I hire them and figure it out later.
The main thing that I got watching Mark [Benioff] was the clarity with how important the big vision is, and, really, in my logical engineering brain, to the degree, he was overstating it. But I learned how important that was. And he would make these bold, brash, visionary statements. And that was the direction that the company ran in. And that is something that’s incredibly valuable.
One of the trade-offs when you have such a clear, vocal leader, it takes away a little from it feeling like it being the employees’ company.
Culturally at Okta, I’m really trying to make it feel like the employees’ company — how we share information, processes and procedures, how we try to emphasize trust and collaboration versus rules and mandates.
I think that when founders build companies, they look back in their career, and sometimes if it’s very early in their career, they look back to college or school and try to bring that to their cultures. You know, I think you see Google, right. Google was a college culture. The founders there were getting PhDs and that shaped the culture. So I think I’m no different. I think I try to combine the best parts of Salesforce and the best parts of PeopleSoft and throw in a little bit of my personality on the side, and let the chips fall where they fall.
[At Salesforce], I got an inside look at the cloud and how powerful and valuable it could be for customers. And how differentiated it could be and disruptive it could be for the competition. So I got a firsthand look into that.
Anytime there’s a big disruptive shift in technology, there’s an opportunity to build great companies…Anytime there’s a technical transition, these young companies have a shot, and probably have a more advantageous position than the big companies, because they don’t have to unlearn anything, they don’t have to fight with internal fiefdoms to invest in the new projects. So I got really excited about this transition to the cloud. And the other part about my career is there was part of me that wanted to be the boss, and part of me that wanted to attack the challenge of creating a company from scratch, knowing that the odds are very long…I couldn’t be the person who didn’t take a shot.
On selling the idea to his wife: I did what anyone would do, you know. I wrote her a PowerPoint deck presentation, and it was called “My proposal to quit my job and start a new company.” And the subtitle was “Why I’m not crazy.”
We took that feedback, and we talked to probably 50 people about SaaSure and that product mock-up, and right at the beginning we pivoted to identity. Because they kept telling us, hey,
you know, this monitoring is kind of interesting, but the problem I have now is people log into their windows PCs on my network and everything works great until they have to go to Box or until they have to go to Salesforce. So just solve that problem.
It had the good combination of a pain point that people would pay for and want to solve for…and then also, this is also equally as important: You have to be able to build, at least for us, we wanted to build an iconic tech company, so you had to be able to have enough confidence that you’d be able to build this iconic tech company around this initial idea. A lot of initial ideas — people will pay for them but they don’t have that long-term staying power. They become a feature.
It turned out to be the only pivot we made. And it was pretty efficient because it was only two of us and no customers and we hadn’t raised money yet. If you’re going to pivot, it’s the best time to pivot.
I had this idea that if we could get enough customers, the vendors would never be able to stop that train.
It’s not the customer’s problem, it’s our problem, and we’re going to make it work for them.
When I was running big groups, my decision-making process was super fast and super confident. And that’s an advantage that helps your teams move faster and it’s clarity of thought, which is a good thing. But as a CEO, my decision-making process really slowed down…you have the ultimate call…you have to make sure that you get involved in the right decisions you don’t overly involve yourself in all of them. And you have to be ready to make them.
I think this is where a lot of people could do better, even if they’re not the CEO: Spend more time just gathering context and gathering information so when the time ultimately comes, and you need to ponder that decision, you’ll be equipped to do it.
For me it was a real change in mentality from like, I’m gonna make the decisions, I have all the answers to, you know what? I don’t know. I have some ideas and I’m going to share them with the team and with the board and have a kind of a perspective on where we should go and what we should do, but I’m going to be open to not knowing and and getting the team to help me figure it out.
I think a lot of companies go through this, this kind of middle ground where they’re not the shiny new kid on the block anymore but they’re really having established themselves, and we were no exception.
The growth has been very, very significant, so it’s definitely a different job all the time.
When you’re early on, it feels very frenetic. It feels like every minute you have something coming at you. You’re doing three jobs, you’re the recruiter or the product manager or the, you know, the counselor. But as you get bigger and bigger, you get basically you get amazingly talented leaders…and you have all these people that know way more about their job than you do…So then, I think your job becomes, how do you get involved and, this is a continuous evolution, but how do you get involved in the things where you can really move the needle.
The marketing strategy was very customer centric. So from day one, it was get a customer, make them successful, have them help them tell our story.
Journalists, I think, like anyone else, they respect authenticity, they respect people that are trying to do something good, treating people fairly. And then, more than anything else, they respect people that treat them fairly, you know, tell them the straight story, the good and the bad.
I’m motivated by a challenge and I think that it’s a huge challenge. It’s a huge challenge to make make your company successful. It might be even bigger challenge to go from where we are now to building an iconic technology company that will be remembered for decades in the future.
You have to be able to thrive in multiple waves of technology. So the cloud computing wave when we started Okta, that’s 11 years ago. So that wave is going to continue to evolve and change, and we have to prove that we can thrive in the next wave.