Hey Fools,
I know there’s some concern about Okta, particularly in relation to its growth rates and innovation. So I’m sharing a few links. The short version is they are not meaningfully slowing down, that there is a big runway ahead and they have an elite CEO who is well aware of the challenges they face.
Also, before you dig into these, read this first excerpt from the O’Shaughnessy interview. It gets to the heart of why our companies are valued so high, namely that they are at the forefront of cloud innovation and are able to see where the tech industry is heading to a degree that’s unprecedented.
Okay, on to business. Here’s three real good links to help you better understand this CEO and his company…
Excerpt from Patrick O’Shaughnessy’s Founder’s Field Guide with Todd McKinnon
https://investorfieldguide.com/todd-mckinnon-creating-and-de…
O’Shaughnessy: When I did this same format with Twilio’s Jeff Lawson, CEO and Founder there one of my favorite questions to ask him is one I can ask you too, which is it’s almost like an unfair position that you guys get to see the future because you’re an integral part or supplier to other people building new stuff. So, I’m curious for any observations you have there, if you do think you get to see the future a little bit – what are you seeing in terms of the cutting edge new technologies being built today?
McKinnon: The thing that always strikes me is … we think the world is further along technologically than it is. There’s still a lot of value to be delivered to companies just doing basic things. We have a product that adds another layer of security by doing multi-factor authentication so not only password but also checks a six-digit code and sends you a push notification. For us it kinda seems like “man doesn’t everyone have that already? Isn’t that on every application?” But there’s just so much out there that doesn’t have basic security like that. So the thing that keeps hitting me is how much opportunity there is in basic steps to help companies be more secure and help people be more secure, and at the same time helping them get online. We live on the Internet all the time and we think everything’s online. But there’s still a lot of businesses that have a lot of work to do just getting online and the potential there is tremendous. Some of them will never make the migration and they won’t persist long term, but the ones that do I think they can have a great future.
O’Shaughnessy: What question, broadly speaking, are you trying to answer most right now?
Mckinnon: What is the best way, over the long term, to persist the growth of Okta? That gets to so many core things about my job. Which is, it comes into picking the right markets, picking the right time to expand, the whole conversation we had around innovation and fostering innovation. Competitively, how to focus on that. And what markets can we dominate and what markets will be harder to dominate. One of the great things about building a company that’s becoming a platform that is so central to so many things is that there’s a lot of options, but it’s kind of a blessing and a curse because there’s so many options. (laughter). Sometimes I wish I would have just started an expense management company and could just work on expense reporting. Either that or a video meeting software company. That would have been a good investment.
Of note, he does seem a tad pooped here - one can only imagine the strains right now of managing a large company.
Todd McKinnon Interview with Yahoo! Finance
https://finance.yahoo.com/video/companies-more-cloud-computi…
Here, McKinnon talks in detail about the cloud computing industry, the long term trends they’re “surfing” on. These are 1) companies need to use more cloud computing; 2) need to have tighter contact with customers, have better communication which necessitates building better websites, apps, more online experiences and 3) do it all securely.
He talks about how valuable it is for them to be on the Amazon Web Services marketplace as a top app. And he discusses their close integration with AWS, particularly with a product called “Control Tower” that is tightly integrated with AWS.
This is an excellent and short interview done just a few days ago.
McKinnon Twitter Thread
Here McKinnon openly confronts concerns about the company’s commitment to innovation.
https://twitter.com/toddmckinnon/status/1334668672523067392?..
Feedback is a #1 priority for a CEO, especially when you’re in an enviable position like @okta. And this year, we got some tough feedback from the Magic Quadrant. We’ve been a leader in every identity MQ, but we have a lot to learn from this year’s.
Bottom line as our board’s resident Narrative guy – for me I continue to put a tremendous amount of value on the quality of the CEO. He’s the hero of the story the one who drives it all. And for me McKinnon is near the top of my list, along with Prince, Yuan, Kurtz and Lawson.
I always return to Jim Collins definition of a “Level V Leader” – the best of the best.
Level 5 leaders display a powerful mixture of personal humility and indomitable will. They’re incredibly ambitious, but their ambition is first and foremost for the cause, for the organization and its purpose, not themselves. While Level 5 leaders can come in many personality packages, they are often self-effacing, quiet, reserved, and even shy. Every good-to-great transition in our research began with a Level 5 leader who motivated the enterprise more with inspired standards than inspiring personality.
McKinnon epitomizes this. And I am convinced that what he’s already achieved in building a 30+ Billion-dollar company was harder than what he’ll need to do to take his platform to 100B and beyond over time.
I highly recommend following him on Twitter – he’s exceptionally open but never cringe-inducing or affected. He gets communication and social media.
And lastly, I’m big fan of branding and all things related to cool factor. Cool is money. Ask that car company guy or the Crowdstrike team. Sales and Marketing trump technology every time.
I’m forgetting the name but Okta originally had an awful, generic, forgettable name. But switched to Okta which is strong, sharp, easy to recall and it’s not essentially meaningless like Roku or New Relic. It’s a unit of measurement that meteorologist’s use to determine the degree of cloud cover. So that works well for a cloud security related company, without being too on the nose.
Here’s the Wikipedia page for the term…
https://en.wikipedia.org/wiki/Okta
Thank you all yet again for all your hard work and helping to make this an unforgettable year as investors despite the incredibly painful stresses we have all been under.
Fool On,
Broadway Dan