Filip Kaliszan is the chief executive officer and founder of Verkada, a Silicon Valley Unicorn disrupting the $100b+ industry of physical security. Since founding Verkada in 2016, Filip has led the organization’s technology growth into five essential security product lines with more than 11,000 customers. He has overseen Verkada’s international expansion, scaling its workforce to more than 1,000 employees across the globe, which has led to being named a LinkedIn Top Startup three years in a row and listed as a top place to work by Inc. Magazine and San Francisco Business Journal.
John Shegerian: This edition of the impact podcast is brought to you by ERI. ERI has a mission to protect people, the planet, and your privacy and is the largest fully-integrated IT and electronics asset-disposition provider and cybersecurity-focused hardware destruction company in the United States, and maybe even the world. For more information on how ERI can help your business properly dispose of outdated electronic hardware devices, please visit eridirect.com
John: Welcome to another edition of the Impact Podcast. This is a very special edition. We’ve got with us today, the founder, and CEO of Verkada, Filip Kaliszan. Welcome to the Impact Podcast, Filip.
Filip Kaliszan: Thanks, John. Thanks for having me. And yeah, excited to be on the air, and share the story with everyone.
John: I just have to give the truth in advertising, even their own, I don’t take any advertisers on the Impact Podcast. I do want to say this upfront. We are a client of yours and a very happy client of yours. And that’s why I’m so honored to have you on the show today because I really want others to hear about your great products and services so they can also enjoy the benefits of these. But before we get to that, I want to just say, I would love our audience to get to learn a little bit about you. Where did your journey even start, Filip? And how did you get here to be such a serial entrepreneur and a unique visionary that you are?
Filip: Sure. Well, I’ll give you the short story of Filip, if you will. It starts back in Eastern Europe. Actually, I grew up in Poland. So that’s my origins. My parents were fortunate. They move jobs and lived as expats in Paris for a number of years. So that’s where I learned English. I went to an American High School in Paris.
Filip: So that was my first exposure to being international. And then from there, I came to the US and I came to Stanford to study computer science and it was actually remarkably. I’d never been to the US before coming to Stanford. And it was kind of an amazing place to end up and land and be surrounded by technology and builders of technology. As a kid, I always knew I love technology. I love computers. Maybe it was a lot about gaming, but then it evolved into sort of the more creative part of my brain and, you know, building things, developing things. And I think, Stanford really fueled that passion of mine and surrounded me with peers who are probably better than me at computer science and that was great because they inspired me. But, I sort of rallied my friends and I think from the beginning of my journey there, I always love building things. I think, what drives me intrinsically is, if you can create something out of nothing and then have people like yourself, like happy customers benefiting from the things that I get to build. Man, that’s like the best feeling in the world, right? So that’s what I live for. My journey started with, actually, the first start-up that I started at Stanford as a student. So I built, you know, so we were students. This is like back in 2007, 2008. I’m at Stanford in Silicon Valley and in my mind it’s like the most modern high-end part of the world, yet, the way you chose classes at school was out of a book, like, literally, as a student in 2006-2007 at Stanford, you’d get this book of every quarter and you’d flip through pages and pages and pages, and you’d have to make a decision about one out of thousands of classes that you were going to sign up for. And man, like as a student knows, well, in the era of Google and Facebook, and everything else going on that ought to be better. And so, that was my first start-up. I built with some of my classmates a tool for students to discover classes, build their academic plans, and really be able to realize the most out of their undergraduate and graduate educations. And that was, I think the first time I built a product that was massively used by a lot of people and I think I discovered that passion for building right there.
John: So you digitized what was it typical analog book, a coursebook and you digitize the process and therefore, modernize the whole system.
Filip: Yeah, exactly. We made it very easy for students to pick classes, compare notes with friends, and like, “Hey, which professor is best at teaching which class?” and so on and so forth. Set of fun elements to it, but it became ubiquitous at Stanford. And then we got that company over to I think, 30 or 40 top universities in the US and then, we sold that company to Chegg which you may know in the education space where I was for the next couple of years. I often talk about Chegg as this awesome business school in real-life experience, right? I studied computer science. I learned how to build things. By a mix of hard work and luck, I guess I got acquired and got into Chegg. And for the next four years, I helped scale that company from 80 people to close to 1,000. We went public and that was my- I called the MBA in real life and I’m thoroughly grateful to the leadership team there for teaching me how business works, right? I mean, it was like my real first exposure and I think that’s what gave me a lot of the background and the excitement to do something again later on which is what led to Verkada ultimately.
John: So wait a second. What’s so interesting Filip is you went to one of the greatest universities on the whole planet and so many people think that once you go to Stanford or Harvard, you should know what all. But what you point out is something really important that a lot of entrepreneurs don’t think about. The real-life experience that you got to apply as a build resume maker after you got out of Stanford both at CourseRank and at Chegg was invaluable to your journey, you’re saying.
Filip: Yeah, absolutely. I think, honestly, one of the most valuable things you learn at a place like Stanford is I think, the humility. You get exposure to so many people who are just so smart. They’re the smartest people from the best schools in the best places in the world and that really gives you perspective and it definitely did for me. I was just so ecstatic to work with those people and build something together. And then, you take that academic background, and then you have to combine it with real-world experience, right? And I think nothing matches that. You start building something. You get it to the users. You get it to the customers. You listen to the stories. The Chegg, we used to travel around the country to meet students at different universities. Really understand their situations to get their mindset. And that’s how you get that experience to really understand the intricacies of the products you want to build. I think through that experience, I realized that what I’m passionate about is building and delivering that product experience that at the end of the day, resonates with customers.
John: You know, I don’t want to glance over another important point you made. You’re a first-generation Polish immigrant and I’m a third-generation Armenian immigrant. My experience growing up in New York City and now living on the west coast. Filip, tell me what you think about this. Immigrants make great entrepreneurs because our DNA is comprised of a lot of flexibility and resilience and the ability to adapt to the changes that are happening in the marketplace. Do you feel that immigrants have almost a leg up in the terms of the world of Entrepreneurship because of their resilience and their fortitude to adjust to the conditions they’re in?
Filip: Yeah, maybe. I mean, look, I think in my own journey, the international upbringing definitely fostered that feeling of resilience that you’re describing. I think the other thing that I would say certainly is true for me and I think true for many immigrants, you know, I’m curious what you think but for me coming to America, the American dream is very much alive. I’m like, I’m coming here, it’s a big market. I want to make an impact. They want to do awesome things. I love the fact that in America, you can be 22 and build a company that thousands of people, thousands of students at the time were using. The idea that someone could buy a group of students and that I could be having an important role in a company that won’t went on to go public. I mean, man, that doesn’t happen anywhere in the world and I think Silicon Valley is super special and I am eternally grateful for being here and having that experience.
John: That’s Interesting.
Filip: I mean, that’s part of that whole dream.
John: Yeah, it is. It’s fun when you get to hear it through somebody else’s eyes because it’s constantly re-inspiring. It’s constantly re-inspiring.
John: So talk a little bit about, you know, now, you’re finished with Chegg. You’ve had now really true success stories under your belt both for CourseRank and Chegg now. Even though they’re intertwined in their two success stories. You’re still very young. Where did the vision? Where was the “Aha! moment” to create for Verkada? And for our listeners and viewers out there, I’ve got it up on my website, on my browser. I want others to be able to check it out. Please go and check out Verkada at www.verkada V-E-R-K-A-D-A verkada.com. Where did that Aha moment come from?
Filip: Yeah. I think kind of going back to the earlier part of my story. I think at that point after Chegg and my career, I had realized that I’m a builder and what drives me is building products and specifically, working with technology. I think there was like a big requirement for me. I think when folks start companies, they often think about, “Hey, what’s the market? How big can this thing get?” And I think for me and my co-founders, there are two components to it. One certainly was kind of how impactful and important this idea can be in the world. But the second which was I think just coming from my personal experience and maybe my personal bias was “Hey, I know myself, and I know that I’m going to do best if I work on products that I love to interact with every day.” And so that was the drive to start something that’s truly a “technology company,” right? With meaningful software, meaningful hardware, innovation, and that journey that led up to Verkada really spend months before, right? So, following the decision to start something again, I started pulling sort of the folks I’ve worked with before together and we gave ourselves a big chunk of time to really flesh out and land on the idea that we would ultimately build, which became Verkada. And I think in retrospect, perhaps, one of the best things that we’ve done. We didn’t jump on the first idea. We took and we gave ourselves a year and it took us about, I want to say 7 months of the year where we were day in and day out working on different ideas and we would commit to them, right? We would take an idea. We would prototype it. We talk to investors, we talk to customers and we had many ideas which you know, we went through that cycle and we said, “Actually, that one’s not great because of the reason XYZ.” And ultimately through that process, we landed on video security as a market. I’ll tell you why that was exciting?
Filip: Video security, when we looked at it in 2016, we get excited about it because my co-founders and I have been exposed to physical security cameras in the enterprise context. And the realization we had was that a lot of the products are used to protect schools, protect airports, protect hospitals. Those tools were far behind or they felt like they were hard far behind from the software perspective from some of the consumer products that all of us are used to, right? I’m sure you’ve had a nest camera ring or another product at home. And all of those are awesome, right?
Filip: Great. And I was super excited about those products and I’m like, “Wait a minute. Why aren’t the things at the airports and the hospitals where the security is that much more important? Why aren’t those products equally innovative or equally evolved if you will?” And that was the genesis of the idea for Verkada and very quickly, we started working on early product prototypes and showing those to customers. And they validated this assumption. The customers very quickly told us, “Wow, Filip. If you can actually deliver on what you’re saying, we want to place orders. We want to try it. We want to get betas.” And that really gave us the momentum on this particular idea to commit, to incorporate, to start the company, start hiring, and really chase this idea of building a modern cloud video security product.
John: Filip, that’s fascinating. You did something, you know, I had never heard of it being reverse engineers like that. You chose your people first and that was the most important part of the process. That was one very important pillar of your process and then you concurrently went down the road with numerous ideas and then chose the best idea on the group’s best thinking, which, typically, there’s a singular or dual or triple entrepreneur group that gets together. They come up with the idea and then they choose the group you see to have done that reverse but still come out with an amazing idea and vision.
Filip: Yeah, I think I was lucky I had a group of folks that I’ve worked with before and I met Hans, one of my co-founders actually in this process of exploration of ideas. As co-founders, we all get along extremely well, and I think that’s one of the core ingredients of a start-up on its journey. I’m sure you know that the journey is always ups and downs, successes and failures, and the resilience of the team, the persistence in executing against the goals, especially in the early days, that’s a critical factor in getting the thing off the ground.
John: That is so true. People sometimes don’t understand that the people sometimes is more important than actually which business enterprise you choose because the people, if they’re all good and work well together and have the right chemistry, they can make it through any battle together. But if the people don’t really have the right chemistry, even a great idea will never get realized.
John: So that’s fascinating. Okay. So you chose security. Let’s catch up with the business enterprise world to what has become a very successful home market. So when did you have something ready to launch and when did you launch the first iteration of what you had created?
Filip: Yeah. We started the company in the summer of 2016 and it took us about a year, maybe 14 months from the day of starting the company to launching our first product, which was our first two cameras into the market. And that, by the way, was a sort of an incredible experience in itself, right? I’ve done software products before. Hans, one of my co-founders has done hardware products before in addition to software, and I was just amazed by how quickly you could iterate and move on hardware execution. So that in itself was awesome learning for me, but about 14 months after starting the company when we launched our MVP. Our first minimal viable product that we started selling to customers or our first camera. And that then drove the kind of adoption and reception in the marketplace and made us realize that “Hey, we’re actually onto something, right?” Once you get off the phone with a number of customers and they’re nodding and they’re happy and they’re smiling as you’re showing them the features, you’re like, “Okay, good.” Like we’ve done something right here and that’s when the real work starts, right? And by the way, 2018 was our first year of sales and our first full year of sales. And I remember that year, we made a plan of execution of how much we would sell and it was tremendous. We sold, I think, 6x of what we have planned, which sounds amazing right on the outside and from an investor perspective, amazing. Internally, that meant producing six times more hardware and scaling the software platform, six times faster than we had planned. It was just a tremendous amount of work, but it’s certainly got us off on the right momentum, on the right pace, and validated [inaudible]
John: That’s a good problem to have.
Filip: For sure, good problem but none of the last, like, it’s quite a challenging beginning to the company’s journey. I think the other thing that I’ll point out, as you know today, I think folks look at Verkada and was like, “Hey, what you’re doing makes sense, Filip. It’s obvious buildings need this.” When we started at the beginning of 2016, folks look at this like, “Why are you building cameras?” Like kind of, you know, not the market that I know the most about. Everyone in 2016 was talking about, self-driving cars and AI, and VR, and I feel go do that. I’m glad we persisted in our initial idea and actually built out this business.
John: I just want to ask you a question between 2016 and 2018, you and Hans, and your team already we’re successful human beings. As success goes, you already had two big wins under your belt, Hans as well and your teammates as well. You’re all, of course, with the tremendous education behind you. So you have great resumes, and great success stories. How hard was it for you to raise the money to make Verkada a reality? Is too hard even with the track record, or is it much easier?
Filip: No. You’d be surprised, it was quite challenging. I think, our thought initially was like,”Yeah, we’ve done companies before maybe this will be a cakewalk to raise the seed run.” And by the way, the markets were very active. But I think, as I said earlier, initially folks talk to us and they looked at it and they’re like, “Why are you building cameras again?” The idea didn’t really resonate.
Filip: And the market wasn’t one that investors were familiar with and I think the fact that we decided to develop a solution as our first product, which was combining hardware and software, which we felt was critical to delivering this awesome customer experience by the way. That fact of building the hardware made the business seem much more risky, right? And so, I would say in the first year of the company, it was a lot of sweat to get investors into the company. In fact, the first money into the company came from the founders. And in the first 12 months, we definitely had a moment where I was pulling out my own checkbook and writing checks to make payroll and it was a stressful first year, but once we started selling the product, that story changed quite a bit. The market reception and the fact that customers were talking on our behalf, was really the big shift in how investors perceived this market and our company.
John: When you pull out your own checkbook to make payroll, that means as all other great entrepreneurs, you’re all in. You are all in.
Filip: We were all in. Yeah. We wanted to make this work and it was [inaudible] at one point but I’m glad we produced and made it through.
John: So you raise the capital. You do 2018 and you do 6x of what your forecasts and projections were. So, explain a little bit to our audience that having had the benefit of using your great products and services yet, how did you differentiate yourself from what was the traditional legacy enterprise cameras and security systems compared to what you’ve created and where you’re going with this?
Filip: Sure. I’ll tell you both the answer that we had in 2016, the original, and then where it’s evolved to be in words. How’s that, right? Because they’re quite different.
Filip: So, where the story started was, “Hey, let’s build a cloud-managed enterprise security camera for companies that have hundreds or thousands of cameras deployed, right? So, if you think about your home use case, maybe you have a ring or a nest cam or something like that.
John: That’s right.
Filip: You know, most folks are familiar with it. Typically, in a home environment, you might have 1 to 5 cameras. I think the average in a consumer world is like 2 or 3 cameras. That’s very different in the enterprise, right? And that was like, one of the first things we had to design for which we realized that many of our customers would have hundreds or thousands of cameras at disparate geographical locations, often with limited internet connectivity. Think of a warehouse in Rural Arizona, they might be protecting goods in that warehouse. They might have 40, 50 cameras, and it might be running on an ADSL connection, right? So we had to design the product with that in mind and that’s where the technical architecture and design of our system came from requirements like those and conversations of these customers. And so, really what we developed at the beginning, in 2016, was a modern cloud-based security camera that you plug in and it just works. It’s like the iPhone of cameras. That’s how we fought about it.
Filip: We got it. It works and meets your needs and it doesn’t matter if your internet connection is crappy. It doesn’t matter if you have 50 or 100 or 1000 of those cameras. It should just do what the users expect and importantly, it’s an all-in-one package, right? So it removes the burden from the customer of integrating with other products, kind of combining different systems and we guarantee that it works well, right? And if something is off, call our team. We’ll be there, we’ll help you fix it. We’ll navigate the issue. So that was the approach at the start of the company.
Filip: You know, I alluded to that. That vision has evolved. I would say we’re very much like a product-vision-driven company, right? We’re all excited about what we’re building and that vision, 2 or 3 years into the journey evolved from. Verkada is just a camera company actually, we want to build the operating system that all commercial buildings and physical space run on. And what does that mean concretely? What is an operating system for physical space? To us, that’s the sum of different devices, and adjacent verticals working seamlessly together. So, we started with cameras. We then build access control. So, think of every building where you badge in and out and kind of control door locks and access to those buildings. We then build sensors, initially for vape detection and then for air quality monitoring, which we can talk more about that [inaudible].
John: We’ll talk about that. Yes.
Filip: We kind of kept expanding and the theory behind the company is that really over the next decade. And by the way, we have a very long view of this company. We want to build this to be a long-lasting sustainable company over the next decade. We plan to invest in many of these adjacencies with a philosophy of building the number one excellent product in each of those categories. And with the dream that one day, if we have many products across these different categories, they work seamlessly together and so now you have a unified way of managing your building and that we think of is that operating system of the building of the future. So that’s what we’re building towards today, but happy to kind of dive in.
John: So, for instance, from the building manager of a big building in Downtown, New York City.
John: I have a report of dashboard in front of me up on my laptop or my tablet and that dashboard will tell me everything I need to know. What’s going on in that building in terms of air quality, security, visual security, and other types of security. One dashboard and it’s all there for me in one dashboard.
Filip: Yeah, that’s correct.
Filip: You can do that in all locations or you can do that remotely, right? So if you’re kind of security person managing many sites, or maybe you’re on a campus and you’re walking around, you just take out your phone and you can see everything that’s on the web right there on your phone and kind of access the different devices whether that’s cameras or access control or anything else. Yeah. In one place.
John: For our listeners and viewers who just join us. We’ve got Filip Kaliszan with us right now. He’s the founder and CEO of Verkada. You can find Verkada and their great products at www. V-E-R-K-A-D-A.com. verkada.com.
Filip, you’ve been in this now for 6 short years, but 6 short years can feel a lot longer when you’re an entrepreneur, obviously, but relatively speaking, 6 years is a tight timeline. How many employees have you grown to? And how many cities and countries do you now cover? Forget the cities. How many countries are you now in?
Filip: Yeah, so we’re international, we’re a global product and we’re growing that presence very quickly now. We started in the US and obviously, targeting the domestic market initially realm[?]. It’s the easiest way to go that’s where we started but our product is relevant globally and I think actually, one of the key advantages of Verkada, just as you can think of a single pane of glass for all of your locations within the US. You can think of a single pane of glass for multinational companies dealing with these challenges across different countries. So we’re very actively, working on expanding globally the business. Today, the core of our team is in the US, so our engineering team is based in San Mateo, California. That’s where most of the development effort happens on the product. We have sales teams across the US. We actually have 4 offices in the US. So, about 1,000 people.
Filip: 600 in San Mateo. We have a Salt Lake City and an Austin office. We kick those off. I want to say, 18 months ago with like three or four folks, and they’re both up to like, 100 people now. And we just opened Tampa in Florida, and Scottsdale outside of Phoenix in Arizona. So we’re super excited to have a presence across the United States and that gives us access directly to the customers because so much of it is about building that lasting relationship and building that trust with the customer. And so really having people in the region and being able to talk to those customers, visit those customers, understand how they’re using our products. It makes a big difference to us. Internationally our presence is today and in London, we have an office for kind of all of the AMIA Market and then we also started working on our Australia present and with an office in Sydney. So yeah, we’re expanding and we see global expansion as a huge opportunity.
John: So exciting. Let’s shift now the conversation to the customers and communities you operated. Obviously, I said at the top of the show and for our listeners who just join us or our viewers who just join us. You know, ERI is a large E-Waste Recycling, and Hardware Data Destruction Company. So, hardware data protection and the site on everything we’re touching is very upmost critical nature. So, we are not only a customer of Verkada, but we’re a very happy customer and we continue to buy and use your services and it’s improved our company massively. Talk a little bit about the other customers and communities you serve. So our clients, our listeners, and viewers can get a real view of the multiple uses of your products and services.
Filip: Sure. Yes. Maybe I’ll start with the beauty of our product suite and as we design it. The same products we build are relevant across many verticals and many different categories of customers, right? Whether it had to be, I don’t know, industrial or food production or maybe medical healthcare or education, right? So we have a very broad range of customers that use our products in different settings. And I think, what’s common is that customers are drawn to our solution with the ease of experience, with the ease of use of our products. It makes navigating the challenges of physical security, much easier for them. So that’s maybe overarching. We can kind of zero in on any given of those segments and happy to give you examples of how folks use, and better use the product. But you know, I’ll give you like an anecdote may be from, you know, we get stories from customers all the time.
Filip: Of course, these are security incidents, so I can never name the customer. [crosstalk] I don’t want to disclose that but we’re happy to share a story.
John: Of course.
Filip: For example, we have customers that are, you know, Retail Bank locations and I’ll give you kind of a camera story where I really was excited about the impact on the situation that our product had, right? So we had a bank that deployed our cameras and as a user, you’ll know that with the Verkada camera product, it’s very easy to share access to a camera. So, there’s something bad was going on on one of your sites, you could text a link to someone else and they can securely pull up the camera feed. So we had one of these situations where actually, an armed robber came into a bank that was equipped with Verkada and help people posted, which is obviously a very serious, very bad situation to be in. And what was remarkable was that, during that incident, that bank was able to share access to the video with the police force that was on-site, which is just kind of unheard-of, right? Like typically, video security is something that you use after the fact, right? Like things that may happen and then you evaluate what happened and maybe you use it for insurance or whatever. And so that was one of the first times where like, “wow” I was so excited because our technology was used in real-time by the First Responders on the ground that made their jobs easier. It kept people safe and gladly that situation was resolved without any casualties any injuries, which was obviously, great to hear. So that’s one class of–
John: So, let’s parse that out. So, instead of a de facto use, which is historically the way the video feeds are used for. Like you said, law enforcement purposes, insurance purposes. This was a real-time use where they actually help resolve the issue and potentially help prevent a catastrophic result.
Filip: And I can give you like maybe a less scary but a different class of use case, right? A lot of schools are our customers. They deploy the products, cameras, but also access control. Also, vape detection, which we should talk about to protect their students. And again, historically, folks would only use video security after the fact when something goes wrong, but now because it’s so easy and so accessible, they’re able to mitigate situations in real-time. We had a school where the school was going into lockdown because ammunition bullets were found in the school parking lot, right? And as you imagine, that’s like a terrifying situation and police get dispatched and so on and so forth. In that particular situation, it was very lucky the school administrators were able to use our cameras to find that. It actually was a completely innocuous situation. A parent was dropping off their kid, and some crate fell off their truck and it happened like there’s no bad intent, right?
Filip: So they were able to track it back to the person, call them, confirm and what could have been a long lockdown period was kind of quickly diffused. And that’s exactly the kind of story that we want to hear, right? We want to kind of proactively help, folks keep their tenants, keep their students safe.
John: Fantastic[?] I assume healthcare services, law enforcement, and financial services are all heavily now starting to become users of your hardware and software. Is that true?
Filip: They are. They are and I think those use cases obviously, vary vastly by customer. But yeah, we’re getting a lot of adoption across the…
John: I want to take a real-life example. Again, I don’t want you to give away any trade secrets or message anything to competitors. But what’s fascinating recently, I’m a native New Yorker and of course, once you’re a native New Yorker that city stays with you and is part of your heart and soul forever. And so recently, they’ve been some very, very tragic situations in the subway systems in New York. I heard the mayor come out. Well, I’m very excited about a change in leadership there and he came out and did a press conference about two weeks ago after the last shooting that happened in the subway system and he said, “Listen, I’m trying to be as proactive as I can be. I’ve sent my deputies out to conferences to learn about all the technologies that now can be installed in subway systems to prevent and detect people who have firearms or live ammunition with them, to prevent these kinds of horrific tragic circumstances from happening again.” Is that where you then step into the bridge and say, “We’re part of that solution. We can be part of that solution.” Is that part of the future of Verkada solving those kinds of municipality and city crises and helping them avoid these kinds of tragedies in the future?
Filip: Yeah. I mean, look, certainly, we’re building towards being able to solve and hopefully prevent issues like that. I will caveat it by saying, it’s a very hard problem, right?
Filip: You’re talking about folks who might be walking with concealed weapons in their jacket. There’s physical limits to what camera people, in particular, can do and so I always ground our customers in that reality, right? The camera is a tool, but cameras have limits too, right? I think our job was as a vendor and a manufacturer and the customers’ job who’s implementing these products is really to find that intersection where that technology can drive the most value and do what’s best to kind of protect folks in a responsible fashion, right? I think I couldn’t tell you that, “Hey, one day, a camera will detect every gun.” Why? Because well, cameras don’t see through clothes, right?
Filip: You know, very trivial example but certainly there’s lots that can be done ranging from sensors to cameras, to other technology. Obviously, with access control, we’re working a lot with customers on building evacuation plans, and lockdown plans. You know, if a shooter is present on-premises, how do you navigate that situation in real-time, in the heat of the moment. That’s the sort of thing where we think we can actually really drive meaningful outcomes. And that’s what we’re working.
John: I love what you said earlier that your product and services can actually help resolve situations while they’re happening in real-time, instead of just becoming a historical overview of what happened. It could actually create better results because it’s real-time. It’s a real-time tool, which I just think is truly amazing. Now, let’s go talk about what we just lived through together, Filip, with the rest of the world, COVID. How did COVID help you galvanize some of your thinking and help you create some new products or services that can be even more useful for your present clients and potential clients?
Filip: Yeah. I think the big thing with COVID when it happened two years ago, initially, we didn’t know what would happen in the market and our approach was like, man, offices are shutting down but I think we had assumed the world is not going to all shutdown. Therefore, the market is going to continue to exist therefore, we should continue building products and executing and you know, certainly, there is an aspect of our technology that can be helpful in kind of COVID tracking, contact tracing that kind of thing. But I would say that generally speaking, we haven’t overly shifted the company strategy as a result of COVID. And I think, unlike many industries, COVID was neither a headwind nor a tailwind to us, right? We were sort of agnostic. We continue executing I think, you know, the vision of what we’re doing on the product side. I think some of it is applicable to COVID and pandemic situations. A lot of it is applicable to other aspects of physical safety. I think in retrospect, looking back at it, I think we’ve just stayed level-headed and continued to execute our vision and that’s kind of how we navigated the crisis.
John: You mentioned earlier about the environmental systems that are now sensors, that are now built into many of your systems with regards to air quality, but also potentially vaping. Can you explain how that evolves your technology even more and gives us more opportunities as users and clients of what you’ve created?
Filip: Yeah. That’s actually a really cool story. We were early in our day’s building cameras and many schools were customers and the schools, many of them were loving the product because of this usability and so they started talking to us about this problem they had with kids, you know, kind of under vaping, pandemic smoking and bathrooms and whatnot. And they’re like, “Hey, Filip. Hey, Verkada. How can we solve this problem?” And folks would come up with crazy ideas like, maybe we can put a camera without a lens and we’ve just a microphone and I’m like how are you going to listen to someone smoking? That’s not going to work. That’s not going to happen. And so that’s really what prompted us to kind of think about the problem space was this vaping pandemic in schools. We happen to have someone on our engineering team who was knowledgeable in the space of air quality sensing. And so, we started prototyping initially. It was like almost an internal hackathon project if you will, where we were prototyping, combining different sensors that detect different particular matter in the air to see if we could differentiate what is a vaping incident from a person cleaning the bathroom and using a spray that emits kind of a lot of odor or other things going on, right? And so we build these devices initially, kind of in a very quick way and we realized that actually, we have a pretty good shot at detecting someone vaping and signaling that to the school. And that was the beginning of that journey with that product category. So we kind of put together a more formal program, started beta testing it with schools and I think, it panned out in two ways for us, right? I think, initially, the schools were very much about, “Hey, we want to deploy this so that when someone is vaping we can catch them in the act and stop them and make sure that they’re not doing that.” That was the initial assumption and you know, the product has done some of that. What we’ve also seen in the deployments with the schools though is that they use it as a tool to measure progress on fighting the vaping pandemic, right? So schools will deploy these devices across campus in their bathrooms, in their locker rooms, in their hallways. And in addition to that, not just thanks to the product but thanks to the programs that they’re putting in place. The education that the educators are doing on the subject of vaping. They’re doing the work to teach kids why it’s a bad idea to vape and then they’re using our devices to measure the results and impact of that work, right? They’re seeing through trends from the Verkada vape sensor or quality sensor that over time, there is a trend of decline in the amount of cases of students smoking on campus and that’s obviously good. I mean, we, as a team is super excited about this particular product line. It’s not the most massive part of our business, but it’s just so good to see that one of our products is helping particularly students, particularly young folks not go down this path of an unhealthy lifestyle.
John: Two questions. Is that how your clients received it? Are you finding more and more clients are deploying that product for their use and finding success with it? Number one.
Filip: Yeah, absolutely. I think what we’ve seen as we started with the school use case and we’ve seen a lot of schools adopt that product. And then what we quickly learned and realize, which was a nice surprise is that many other industries began using the same product for slightly different applications, right? So for example, in food safety, we had a lot of applications where the air quality and cleanliness in rooms where you’re handling food products have to meet a certain standard and we’re able to log that quality, record it, make it easily accessible and alert when something goes off, right? If we detect that the particulate matter in the air is too high, we can send an alert, we can create a workflow, and help the customer mitigate that. We’ve also seen applications in cold storage like refrigeration. Oftentimes, it’s trivial things like, man, how many cases we have where the customer installs this thing and they realize that all the problems result from someone leaving a door not fully shot to a walk-in refrigerator. And that’s actually some of the magic you get when you combine multiple products on the platform, right? You have a Verkada camera watching your cold storage room along with one of our air quality sensors. The alert goes off. Hey, the temperature and humidity are above a normal threshold. What’s going on? Oh, I look at my camera. Oh, you know, Joe who badge in left the door propped open, great. I know exactly how to mitigate that problem. Ultimately, I think that’s a preview of the magic that we hope to deliver across all of these different product categories [inaudible] companies.
John: Right. And that led to my second question in that, what you did is once you’ve found the air quality in a vaping application, you’re now taking that vertical of air quality and you’re going into other sub-vertical.
John: That’s wonderful.
Filip: Yeah, absolutely. Folks are now thinking about air quality and air cleanliness in many different ways, right?
Filip: What percentage of air is fresher in a building, right? In the context of the pandemic, that was a kind of a big discussion. So we’re experimenting and I would say, we always evolve our products with user feedback. So we’re listening to those stories and certainly, there’s more exciting stuff that the world will see coming from us.
John: Well, you know, Filip. Speaking of more exciting stuff, talk a little bit about the future. What’s next? I mean you’ve already started, you know, this is now your third venture in many ways and you have two peak successes. And now, where are you on this journey? If this was a baseball game, if Verkada was a baseball game, are you in the bottom of the second inning? Top of the fifth? Where are you?
Filip: We’re just getting started.
Filip: I mean that’s the hardest part to really convey to people and actually, if you ask any of our employees, I feel like every onboarding, every all hands, I remind people that it’s just a beginning of the journey. I’ll give you a data point on that, right? If you look at it, we’re a private company. We’re 6 years into our journey. We’re in a massive market. The market for physical security products, and building infrastructure, it’s over a hundred billion dollars market. Today, we’re a fraction, a tiny fraction of the market. There’s tons of room to grow and as I mentioned, we’re still only a private company. If you look historically across technology companies who’ve gone public and look at the data, I think, I may have to double-check, but I believe the stat is that most of those companies generate the most compounding value in year 7 after the IPO and so I have to keep reminding folks. It’s a yes, we’re a thousand people and yes, we have offices around the world, but to me, it really feels like it’s the beginning of a bigger journey. And I think, importantly, everyone on our team, our co-founders, everyone we hire, we kind of proactively tell this to people, “We’re here to build a lasting business that is important in the world.” That’s the dream. The dream is not to build a quick company, flip it, and kind of move on with life. Really, we want to make a product experience that changes customers’ lives for the better and a business that last generations. And I think that’s a huge, huge challenge and few companies succeed at doing that, but we like that. It’s an audacious ambitious goal and certainly, we’re going to try as hard as we can to chase that.
John: Well, my money’s on you, Filip because you’ve done it before and I know you’re going to do it again here, and I wish you’d. I want you to come back on impact to share the continued journey in the future. For our listeners, and viewers out there to find Filip and his colleagues and to buy his great cameras or get his great software combined. Like we have at ERI which was transformative for us. Please go to www.verkada.com. V-E-R-K-A-D-A .com Filip, Thank you for creating for Verkada. Thank you for making the world a better and safer place. We’re really grateful to you and thank you for joining us today on the Impact Podcast.
Filip: Thanks so much for having me and yeah, thank you everyone for listening. This was awesome.
John: This episode of the Impact Podcast is brought to you by Closed Loop Partners. Closed Loop Partners is a leading circular economy investor in the United States with an extensive network of fortune 500 corporate investors, family offices, institutional investors, industry experts, and impact partners. The Closed Loops platform spans the arc of capital from venture capital to private equity, bridging gaps, and fostering synergies to scale the circular economy. To find Closed Loop Partners, please go to www.closedlooppartners.com