Invest Like the Best with Patrick O'Shaughnessy
00:49:07 · Patrick O'Shaughnessy, Christina Cacioppo
[00:49:07] S0: What would be your big pitch to come work at Vanta right now? [00:49:11] S1: Oh, it's a fun stage. You get 16,000 customers using a product, using agents. When you ship things, they are in use by real people, getting real feedback instantly. It has product market fit. You're just like going and experimenting with like fast iteration loops. [00:49:31] S0: But early enough that you could still... [00:49:32] S1: You can move. Yeah, yeah. We will you move. Yes. [00:49:36] S0: Because it's such an amazing Silicon Valley microcosm. Can you tell like the most detailed version of the Billboard War story that you've ever told?
00:49:44 · Christina Cacioppo
[00:49:44] S1: I was always very much a billboard skeptic because it seemed like, who knows if they work? The tracking is terrible. Founder ego is why someone would do a billboard. Like, I feel cool because my company has a billboard. But I was always very anti billboard. Mid summer twenty twenty one, saster conference. It felt like a big deal at the time. Like, thank God we've almost beyond that. Our marketing team decided to try out of home. I was like super skeptical. Was like, fine, whatever. Try it. And we're going to put something on the billboard. And Sarah, who was our PMM at the time, came up with compliance that doesn't suck too much. Pitched it to our head of marketing, who didn't like it because that we were like negging our users. And was basically like, no, don't. Think harder. Much nicer, but like think harder. And Sarah kind of believed in it. And so she went to me, which she usually does not. She's not a like go around her boss person. But like, who really believed in compliance that doesn't suck too much. And so took it to me. And I read it. And I like immediately left. Actually, immediately texted Andrew Reed, our investor, as like, what do you think? You have good internet meme taste. She loved it. And so you're like, okay. Let's try it. Let's run it. Yeah. So I'm like, what's the worst that's gonna happen? People will think we're obnoxious and then probably forget in six months. So we stand the billboard up. Somewhere like near Birmingham. It goes over so well. We tweeted. The tweet goes viral. The tweet then is over the next couple months, but like ends up on our slash and counting. And the bottom of the...
00:51:14 · Patrick O'Shaughnessy
[00:51:14] S0: Right, you're like, oh, this is a gem.
00:51:16 · Christina Cacioppo
[00:51:16] S1: And I think it really worked because like, it's our brand at our best. Our marketing at the best. Attribute is with a wink. We take our work seriously, but we don't always take ourselves seriously. And so I think there's something to that that resonated. It was a little obscure, but it was sufficiently obscure where if you got it, you felt like you got a secret. Anyway, so like compliance, it doesn't talk too much just for it. '22, market crashes. Turns out there's a lot of billboard inventory available on 101. So we get this great spot where like 101 And 280 intersect and it's on this great spot. For like not that much, especially in retrospect. And we joke and we're like, oh yeah, we've locked it up for years. We were known for this billboard in this spot. I think even on podcasts, said the contract was locked up for years. It was not locked up for years. But that billboard got famous. And so people would contact us and Sarah all the time and be like, how do you do billboard? How do you do billboard? And we're like, oh, we work with this agency. We work with this guy. And so we referred this guy all of this business. So we just like, it's him. It's him. It's him. Millions of dollars of business. Great. Turns out in the background, we did not have a multi year contract, which I should have shown. Certainly if I was going to say that on a podcast. Not really. Do what it says on the tin. And the contract was basically, you've put the billboard up. That's it. This is like not a contract at all. Multiple years go by. Sarah's seeing one of her friends for dinner, works at a startup. And her friend was like, oh, it's so sad you guys gave up that billboard spot. Why'd you do that? And Sarah was like, pardon? And they're like, oh, yeah. We just signed for your spot. And Sarah was like, what? We go back. Or like, contract, contract, contract written in crayon. There is no contract, basically. It's a placement order. Called the guy. And he's like, yeah, you know, it's a placement order. They paid more. So we like swapped it out underneath us. I go to founder of the company and be like, hello. How much can I pay you? And I am like an extremely inelastic buyer here. Like what can I pay you for this spot? And he's like, nothing. And I'm like, how about I double? I think he was paying like 1,000,000.5. And you're like, how about I give you 3?
00:53:26 · Christina Cacioppo, Patrick O'Shaughnessy
Just to get the spot. And he's like, we're actually cash flow positive. So like literally, I'm an inelastic seller. And so we lost a spot. [00:53:34] S0: Good punch line. [00:53:35] S1: Things that made me think, whereas like, oh no, Vanta's screwed. Honestly, losing that billboard, was like, we did probably just lose a bit of market cap. [00:53:43] S0: Yeah, yeah, [00:53:45] S1: You're both bad omen. There is some five z market cap decrease that just happened here. Yes. [00:53:51] S0: Is there anything I've missed that has your curiosity, your attention, you think is really important right now? [00:53:58] S1: You see it in the data center conversations, to some extent in the personal agent stuff. It's like, we just don't trust software companies, tech companies, the way we used to. And that is getting worse year over year. And it's kind of hard to imagine that inflecting back up and getting to the useful optimism of fifteen years ago. In that, companies showing that they are trustworthy and industrial grade and secure through lots of metrics and actual definitions is more important than ever and will just get more and more important. And again, to a host of customers, regulators, lawmakers, auditors, etcetera. Vanta at $250,000,000,000 is in the center of all of those transactions. Helping companies meet those high bars or wherever those bars are set, and then conveying that, helping them go convey that and accelerate their business. [00:54:52] S0: Is another way of saying that like AI has ushered in this extremely high excitement but low trust.
00:54:52 · Patrick O'Shaughnessy, Christina Cacioppo
[00:54:52] S0: Is another way of saying that like AI has ushered in this extremely high excitement but low trust. [00:54:58] S1: Yeah. That's good. [00:54:59] S0: Era. [00:54:59] S1: Yes. [00:55:00] S0: And Vanta's job is preserve Yeah. The excitement [00:55:04] S1: Increase the trust. Legitimately so, not just on vibes. [00:55:07] S0: What will satisfy the market to trust again? [00:55:12] S1: In a B2B context, businesses, I do think there's a vibes piece, but there's a very real data piece. And I would like to see specific things or specific improvement curves or make promises with maybe contracts behind them. That one's quote unquote logical rational, the way like enterprise markets often are. And on the consumer side, it is vibes. That one seems very hard to turn. I do not envy that. [00:55:37] S0: Do you trust them? You use instinct, etcetera? [00:55:40] S1: Big companies? No. [00:55:42] S0: Why not? [00:55:43] S1: It's not that there's anything particularly interesting in my email or chats or whatever. Well, it's not that interesting. But I would rather just Google or just Apple or just insert company here have that information. [00:55:55] S0: What's security like five years from now? Like if you just wrap it up with like, okay, here's where we're going and we want to be the person at the center of this. Yeah. Describe that state for us.