20VC: Okta Founder Frederic Kerrest on Why You Want To Be A Monopolist In A Small Market, The Biggest Challenges in Scaling Okta To IPO and Being a16z's First Ever Fund Check
The Twenty Minute VC (20VC): Venture Capital | Startup Funding | The Pitch
The Twenty Minute VC
4.4 • 637 Ratings
🗓️ 3 May 2019
⏱️ 36 minutes
🧾️ Download transcript
Summary
Frederic Kerrest is the Founder & COO @ Okta, the independent and neutral platform that securely connects the right people to the right technologies at the right time. To date Frederic has raised over $415m with Okta from some of the best in the business including Doug Leone @ Sequoia, Marc Andreessen @ a16z, a dear friend of the show in Mike Maples @ Floodgate, Aneel Bhusri @ Greylock and Vinod Khosla, just to name a few. Okta IPO'd in April 2017 at a stock price of $17, today they sit at $102. Before founding Okta, Frederic enjoyed roles with Hummer Winblad on the other side of the table as a VC and also at Salesforce and Sun Microsystems on the operations side.
In Today’s Episode You Will Learn:
1.) How Frederic came to found the now public Okta having spent time with Salesforce, Sun Microsystems and Hummer Winblad as a VC?
2.) What about an idea makes it worth pursuing and investing in? Does Frederic agree with the advice he was given, "it is 70% market, 20% people and 10% product"? When evaluating a market, what characteristics make for the most attractive markets? How does Frederic think about insertion points into markets? How does he evaluate market adjacencies? Why is it so good to be a monopolist in a small market?
3.) What were some of the hardest times Okta went through? How does Frederic determine the balance between vision and realism? How does Frederic as the leader personally deal with these challenging times? How can a founder determine from their hiring process whether they have product-market fit? What were the key turnings points that contributed to Okta's success? What did you have to get right to keep scaling?
4.) A little birdy told me there was an amazing story behind the a16z investment, what is that story? How did Frederic meet Marc and Ben and how did his relationship with them evolve over time? When analysing his investor base, where did each add real strategic value? What advice does Frederic give to founders today on the theme of investor selection? What should the core considerations be?
Items Mentioned In Today’s Show:
Frederic’s Fave Book: Battle Cry of Freedom: The Civil War Era
As always you can follow Harry, The Twenty Minute VC and Frederic on Twitter here!
Likewise, you can follow Harry on Instagram here for mojito madness and all things 20VC.
Transcript
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| 0:00.0 | Welcome back to the 20 minute VC with me, Harry Stebbings. It would be so great to see you behind |
| 0:04.0 | the scenes here at the show where you can hit me with all your feedback on at H. Stebbing's |
| 0:07.9 | 1996 with 2Bs on Instagram. I really would love to see you there. But to our guest today, |
| 0:12.9 | and for me, when thinking what makes the very best guest, it's energy, it's charisma and it's |
| 0:17.8 | contrarian thinking. And today's guest has all of these in buckets. And so I'm |
| 0:21.7 | super excited to welcome Frederick Kherrist, founder and C-O-O-O-O-O-O-O-T at Octa, the independent and |
| 0:26.5 | neutral platform that securely connects the right people to the right technologies at the right time. And to date, |
| 0:32.0 | Frederick's raised over $415 million with Octor from some of the very best in the business, including Doug Leone at |
| 0:38.0 | Sequoia, Mark Andreessen at Andresen Horowitz, a dear friend of the show in the form of Mike |
| 0:42.5 | Maples at Floodgate, Anil Bushrie at Greylock, and Vinod Kosler, just to name a few. Octa |
| 0:47.3 | IPOed in April 2017 at a stock price of $17. Today they sit at $102. I think that is a might drop moment if ever there was one. |
| 0:56.1 | And before founding Octor, Frederick enjoyed roles with Hummer Wimblad on the other side of the |
| 1:00.0 | table as a VC, and also at Salesforce and Sun Microsystems on the operations side. |
| 1:04.7 | I'd also want to say a huge thank you to Pat Grady at Sequoia, Maynard Webb, Mike Maples |
| 1:09.1 | at Floodgate and Darmeshire, for such fantastic |
| 1:11.6 | questions suggestions today. Really, I so appreciate it and the episode would not have been the |
| 1:15.6 | same without them. But before we dive into the episode today, I'm always focused on scaling my time |
| 1:20.0 | and I was always crap at travel booking and management. Well, not anymore. Why? Because I now use |
| 1:24.5 | travel perk, the business travel management platform that even I love, |
| 1:27.9 | it's just so super easy to book travel and actually quite fun. And my favorite, no back and forth |
| 1:32.9 | with travel agents or your finance team. But it gives you the best of both worlds. Companies don't |
| 1:37.1 | just get happy travelers, but also easier management and as much as 20% in savings, with 100% |
... |
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