When identity cloud provider Okta was founded in San Francisco in 2009, the United States was still struggling its way out of recession after the global financial crisis and the idea that identity management would be moved into the cloud was still considered controversial. Or crazy.
So these two things became important planks in the Okta origin story. The point of telling it here relates to the opportunities for transformational companies to get a start during periods of economic downturn and turmoil.
Because here we are sitting in the middle of a pandemic, a recession, and economic turmoil of as-yet unknown depth or duration.
Frederic Kerrest is the co-founder, executive vice-chairman and chief operating officer at Okta. In the 11 years since establishing Okta with co-founder and CEO Todd McKinnon the company has grown – in rough numbers – to 2,700 employees, 9,000 customers, US$800 million in revenue and a Nasdaq-listed market cap north of US$25.5 billion.
In this episode of the Commercial Disco podcast, I spoke to Frederic Kerrest about a bunch of cool stuff ranging from the prospects for mail-in voting in the US presidential elections, why Australia’s system of compulsory voting is awesome, and why the identity management industry sucked before Okta launched.
He talks a lot about the beginnings of Okta and the turmoil of the GFC recession. And he talks about being one of the earliest portfolio companies of Andreesen Horowitz, and how Okta chairman Ben Horowitz celebrated 10 years on the company’s board last February.
“Certainly, it was a challenging time. But in those times when there is a lot of dislocation, those are actually great opportunities,” Mr Kerrest said.
“If you look at the dotcom bust of the 2000/2001 timeframe, there were some great companies to come out there. And during our time of 2008/2009/2010, you had a whole generation of companies (founded).
The same will be the case for the current recession. Some great companies with great innovations will be founded or get traction during this difficult period.
At a time when the leaders of Australia’s most successful software companies are pointing to the tech industry as a key opportunity for growth in the post-COVID economic environment – and urging government to double-down on support for these emerging new companies.
Mr Kerrest is about as energetic as you would expect, a successful Californian enterprise cloud entrepreneur straight out of central casting. He’s got his own startup-focused podcast – From Zero to IPO – which is great (Canva’s Melanie Perkins was an early interview guest).
The Okta business has two chunky product segments of focus – workforce identity management on the one hand, and customer identity management on the other.
Which brings us to the US election. Surely the founder of a global identity management might have a view on how the long lines of voters, the mail-in difficulties and the hanging chads of yore might be solved?
Well yes, he says. It is a big and highly politicised issue. eVoting will happen. It not straight forward but there is an interesting discussion here.
As for the future, when asked what looks good Mr Kerrest says the opportunity is broad and wide. Anything that touches on security, privacy, or digital enablement in the enterprise looks golden.
But its not all about the enterprise. “E-commerce is going nuts,” he says. Mr Kerrest say in North America, ecommerce as a percentage of total commerce grew from about 6 per cent to 16 per cent between 2010 and 2020.
And then between January and July on this year, ecommerce as a percentage of total commerce grew from 16 per cent to 27 per cent.
That is a crazy beast of an opportunity.