Speaker 1: You're listening to Bloomberg Business Week with Carol Messer and
Speaker 1: Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Actor shares
Speaker 1: they rallied over eight percent today, taking part in the
Speaker 1: overall jump that we saw in the equity markets today.
Speaker 1: Stock though still under pressure, roughly lower by maybe eighty
Speaker 1: percent lit a bit less than that. The seven point
Speaker 1: eight billion dollar market cap company is an identity and
Speaker 1: access management software firm working in the Club and Googgenheim
Speaker 1: upgrade the stock just on Monday, saying the company's valuation
Speaker 1: is quote too compelling to ignore despite challenges that will
Speaker 1: take several quarters to sort out. So we want to
Speaker 1: talk about the business and what is the way forward.
Speaker 1: Todd McKinnon is the chairman, CEO, and co founder of Octa.
Speaker 1: He joins us via Zoom in San Francisco from the
Speaker 1: company's Octane twenty two event. Todd, nice to have you
Speaker 1: here on Bloomberg. How are you. I'm good, Carol, thanks
Speaker 1: for having me on. It's great to be here on
Speaker 1: Bloomberg Radio and TV. Well, it's great to have you here.
Speaker 1: Lots of talk about I gotta ask you though, I
Speaker 1: want to get into the business and about the event
Speaker 1: and some of the news that you guys, you are
Speaker 1: though in the heart of Silicon Valley. Have to ask you,
Speaker 1: is everybody talking about the recent cryptomolies that we saw
Speaker 1: with SPF and f t X. I think we're all
Speaker 1: watching it and we're all trying to figure out what
Speaker 1: it means for the broader ecosystem. But one thing is
Speaker 1: for sure, Silicon Valley is in a different world than
Speaker 1: it was a year ago. Everyone is making sure that
Speaker 1: we're doubling down on our most strategic and important initiatives
Speaker 1: and maybe some of the things we were doing last
Speaker 1: year that maybe it wasn't necessary, We're we're not focusing
Speaker 1: on that as much as we are all of our
Speaker 1: core strengths. And that's why work so excited about this
Speaker 1: conference and what we can bring to the whole technology
Speaker 1: market with our world class identity products. So, Todd, I'm
Speaker 1: just looking at the f A functional on the Bloomberg
Speaker 1: terminal and I it looks like Wall Street analysts have
Speaker 1: you know, thirty growth revenue for the next few years.
Speaker 1: Top line for you guys, what's driving that growth? Well,
Speaker 1: every industry across the world is trying to do more technology,
Speaker 1: whether that's adopt the innovation in the cloud, or keep
Speaker 1: secure and stop the risk of data reaches, or transformed
Speaker 1: digitally and build better customer experiences through the world world
Speaker 1: beating websites and mobile apps and identity is at the
Speaker 1: heart of that. You need to log on employees at
Speaker 1: work and do it securely and make sure there's no
Speaker 1: fishing or any data breaches. And you need to make
Speaker 1: sure you give your customers. You're building that great new
Speaker 1: app at your company. You're getting your subscribers or your
Speaker 1: customers or your citizens online to connect to you directly.
Speaker 1: And you have to have a great app, and that
Speaker 1: starts with a great logging experience. And we have our
Speaker 1: help our customers and organizations around the world do just that.
Speaker 1: You know, I seek some of that top line growth,
Speaker 1: and then I see your stock is down seventies some
Speaker 1: percent year to date. Is this just a tech washout
Speaker 1: or what's the street concerned about with with your name?
Speaker 1: I think there's a couple of things there. There's definitely
Speaker 1: valuations across the border technology you're down. And also we
Speaker 1: took a pretty big, bold step a couple of years
Speaker 1: ago to branch out into this important new market. For US,
Speaker 1: it's called the customer identity management market, which is we
Speaker 1: serve with our customer identity cloud and that acquisition. Over
Speaker 1: the past couple of quarters, there have been some some
Speaker 1: execution stumbles in terms of integrating that, and we're working
Speaker 1: through those now and really excited to talk about our
Speaker 1: long term products. You're talking about that six and a
Speaker 1: half billion dollar deal, right AUTHO and zero excuse me,
Speaker 1: so tell me about like how what kind of you
Speaker 1: know through put if you will, that you're seeing already
Speaker 1: on that acquisition. I know it's early, but tell us
Speaker 1: about that. Well. It's, like I said, it's a really
Speaker 1: important strategic part of the market for US because traditionally,
Speaker 1: identity management has been sold as part of a monolithic platform.
Speaker 1: You got it when you bought Microsoft applications or you
Speaker 1: got it when you bought applications from IBM. But there's
Speaker 1: and that's the workforce identity market, which is employee logging
Speaker 1: in and employees being secure. But on the customer identity side,
Speaker 1: there's this huge untapped potential where engineers and developers and
Speaker 1: product people they're building identity themselves. They're spending their valuable
Speaker 1: time creating log in pages and password reset functionality and
Speaker 1: multi factor authentication. But there's a better way. Every hour
Speaker 1: they spend on identity as an hour they're not spending
Speaker 1: on innovation. So we have this product, Customer Identity Cloud,
Speaker 1: which is the technology from the off zero acquisition that
Speaker 1: can do it for them and free them up to
Speaker 1: spend every hour and every calory they expend on great
Speaker 1: innovation and their products and not on identity. Which were
Speaker 1: the experts and we're talking about Tom McKinnon, co founder
Speaker 1: and CEO at Octa via Zoom from San Francisco. Just
Speaker 1: want to mention a headlined Charlie Pellett talked about a
Speaker 1: little bit earlier. This is coming from information a couple
Speaker 1: of sources, Musk Elon Musk saying the Twitter bank that
Speaker 1: a Twitter bankruptcy is not out of question. So again
Speaker 1: this is crossing the Bloomberg terminal here on this late
Speaker 1: Thursday afternoon. So todd Um in terms of let's take
Speaker 1: a step back, if if we, if we may the
Speaker 1: macro environment right now on the outlook for your business, UM,
Speaker 1: it feels like a lot of enthusiasm, barring the crypto side, UM,
Speaker 1: certainly the equity side of things, because of that softer
Speaker 1: inflation print. How do you see the economy and the
Speaker 1: outlook for your business, let's say over the next six
Speaker 1: to twelve months. Well, we've started oct fourteen years ago,
Speaker 1: and over the past fourteen years, we've seen unprecedented growth
Speaker 1: across cloud computing. Now cloud computing is the you fault
Speaker 1: computing platform for every organization in the world. We've seen
Speaker 1: security risks and the how you could avoid risks with
Speaker 1: great cyber posture. We've seen that become as important as ever,
Speaker 1: and we've seen every organization want to connect with their
Speaker 1: customers online. And the macro, the macro economic environment is
Speaker 1: changing money. A year ago, zero interest rates, investments weren't
Speaker 1: weren't as focused and as scrutinized as they are now.
Speaker 1: And so no company, no organization, no industry is immune
Speaker 1: to that. But what's really giving us a very bright
Speaker 1: outlook for the over the long term is these trends continue.
Speaker 1: Everyone is figuring out how they can adopt the latest
Speaker 1: technology for their workforce. They want to do it in
Speaker 1: a secure way. They want to build world beating customer
Speaker 1: apps because in the time of economic uncertainty, it's many
Speaker 1: times it's the best time to double down on innovation
Speaker 1: so you can leap ahead of your competitors. We know
Speaker 1: this in two thousand nine when I started Octa, we
Speaker 1: took that time. There was an economic problem, but that
Speaker 1: the Great Recession, and we started Octa in this downturn,
Speaker 1: and it was a good time to focus on innovation,
Speaker 1: and we we built the industry leading company because of that.
Speaker 1: So Todd, how would you characterize the risk appetite in
Speaker 1: Silicon Valley these days? If I had a really cool
Speaker 1: idea and I go to Sandhill Road looking for some
Speaker 1: venture capital, how would it be now versus a year ago?
Speaker 1: I think it's I think for the top end of
Speaker 1: the VC market, the premier funds, the the most entrepreneurs
Speaker 1: going out there with the strongest backgrounds and the strongest
Speaker 1: track record. It's as strong as ever. The overall amount
Speaker 1: of funding is way down, and you see that happening
Speaker 1: happen in these cycles. But great entrepreneurs have great ideas.
Speaker 1: They might have to work a little harder to raise
Speaker 1: that round, and the valuation certainly isn't going to be
Speaker 1: as high, but the best ideas and the best entrepreneurs
Speaker 1: they're gonna be funding. I think that's will always be
Speaker 1: true because there's so much potential in technology. At OCTA,
Speaker 1: we are technology enthusiasts. We believe that over the next
Speaker 1: five years you're gonna see amazing innovation and collaboration technology
Speaker 1: and the ways to more more work more effectively, and
Speaker 1: collaborate with teammates remotely. Especially on the security side as well.
Speaker 1: We think there's going to be security breakthroughs that make
Speaker 1: companies ten times more productive, Which is why one of
Speaker 1: our core beliefs is that we believe in this world
Speaker 1: an open ecosystem of innovation. We don't believe. We don't
Speaker 1: believe that a monolithic platform should lock you in and
Speaker 1: and choose and make you choose subpar applications and services
Speaker 1: at the you know, just because they think it's more
Speaker 1: integrated or more secured. We think this open ecosystem, where
Speaker 1: the best innovation can be used by any company, that's
Speaker 1: the right way forward, and that's what we're trying to build. Hey, Todd,
Speaker 1: I think people are listening and they're like, Okay, wait,
Speaker 1: what are you talking about? So how does it affect
Speaker 1: you know, people in their workspaces and everyday lying living
Speaker 1: break it down for us? Well, I think I think
Speaker 1: we've been through the last three years with so many
Speaker 1: people working remotely, and we we've been as an industry
Speaker 1: and as a as a collective workforce. We we've done
Speaker 1: a good job collaborating and communicating. But I think the
Speaker 1: tools that we use, whether it's chat or email or
Speaker 1: video conferencing, that they they weren't designed for this world
Speaker 1: where remote is almost the default, and working in a
Speaker 1: hybrid way in the office and remotely is the way
Speaker 1: every organization, every company operates. So I think when we
Speaker 1: get together in five years and we talk, we're gonna
Speaker 1: be amazed at some of the new technologies. Maybe it's
Speaker 1: virtual reality headsets, or maybe it's a new kind of
Speaker 1: collaboration software that can mix a hybrid meeting where some
Speaker 1: people are remote and some people in the From the metaverse,
Speaker 1: and I'm not making you a joke, like I feel
Speaker 1: like it creeps into every conversation. Is this where the
Speaker 1: metaverse maybe has a real world application. I think what
Speaker 1: I think about the metaverse is really an evolution of
Speaker 1: the Internet. So today we use the Internet on phones
Speaker 1: and computers, but we're going to access the Internet on
Speaker 1: these VR headsets and these augmented reality devices. It's I
Speaker 1: think that's inevitable. I think thinking it's a totally discrete
Speaker 1: thing that's independent of the Internet, or a whole new
Speaker 1: version of the Internet, is probably the wrong way to
Speaker 1: think about it. I think it's it's a new way
Speaker 1: to interact with people, and more people over time we'll
Speaker 1: use these new devices, but it's the same Internet, the
Speaker 1: same way to work, the same way to collaborate, the
Speaker 1: same way to socialize, as we've seen in the past. Todd,
Speaker 1: you're in San Francisco. San Francisco, like a lot of
Speaker 1: tech companies, give us your overview how things are in
Speaker 1: San Francisco these days. A lot of people are saying
Speaker 1: it's best days are behind it. Um, they've got some
Speaker 1: issues here. How do you think about it? I love
Speaker 1: San Francisco. We started locked in San Francisco. We've been
Speaker 1: here headquarters for nearly fourteen years. I've lived in San
Speaker 1: Francisco's I've lived in San Francisco since the late nineties.
Speaker 1: It's a great city, and I think every great city
Speaker 1: has challenges and opportunities in San Francisco's trying to work
Speaker 1: through things. But San Francisco and the Bear has given
Speaker 1: a lot to me. And a lot to Octa, So
Speaker 1: we're focused on giving back and helping it prosper through
Speaker 1: these times, which you know, for a lot of a
Speaker 1: lot of cities these days, is a little used to be,
Speaker 1: all right. Mr Elon Musk his first email to his
Speaker 1: remaining employees was, you got to come in every day.
Speaker 1: What's the work policy at Octa? We're I think we're hybrid,
Speaker 1: so we we give employees the choice to work where
Speaker 1: they think it's most effective for them to work. One
Speaker 1: thing we are learning, and the entire company is learning,
Speaker 1: that there are many things that are done better in person,
Speaker 1: whether it's collaborating on that next great innovation or that
Speaker 1: next great strategy that has to have a lot of
Speaker 1: back and forth, and you have to be able to
Speaker 1: read the body language and build relationships. And that's another
Speaker 1: thing we're learning. As you hire a lot of people
Speaker 1: and as people change roles and work on new initiatives,
Speaker 1: building that trust and that bonding early in the in
Speaker 1: the team work process is really vital, especially when you
Speaker 1: get down the road and you have to deal with
Speaker 1: conflict and deal with controversy. Having that bond that can
Speaker 1: be built from in person working relationship is super valuable.
Speaker 1: So I think the industry we're learning and we're getting
Speaker 1: better at it. Well, last question on that vein um
Speaker 1: really quick twenty seconds in terms of the job jobs
Speaker 1: that are out there, are you hiring, are you going
Speaker 1: to keep your workforce as it is or might you
Speaker 1: have to let some people go depending on the outlook
Speaker 1: were we we are growing and we are investing. We
Speaker 1: definitely are making sure our investments are doubled down on
Speaker 1: the highest priority things we have to do. And I
Speaker 1: think this is an industry wide thing. I think many
Speaker 1: companies that are doing these layoffs, it's it's more about
Speaker 1: focusing their investments on what they think are their most
Speaker 1: strategic differentiators versus I think in the past few years,
Speaker 1: I think we got a little we spread ourselves industry
Speaker 1: wide too widely, and we weren't focused enough on the
Speaker 1: core things that are going to move our companies forward.
Speaker 1: And that's I think what folks are doing. So appreciate
Speaker 1: checking in with you, and I know it's been a
Speaker 1: busy week. Todd McKinnon, thank you. He is the chairman, CEO,
Speaker 1: and co founder of Octa, joining s VA Zoom in
Speaker 1: San Francisco from the company's Octaan twenty two events