🎧🍌 Inside Verkada, the $4.5B Physical Security Company | Filip Kaliszan, Founder and CEO

Going zero to nearly $1B revenue in nine years, why building hardware is easier than you think, how to add new product lines, hardware fundraising advice, and how to evaluate a job at a startup

Filip Kaliszan started Verkada in 2016, and its quickly grown to almost a billion in annual revenue.

They started by building the best camera for physical security teams, and have since evolved into a full suite of physical security products for buildings. We go inside the earliest days of the company and lessons from scaling to 2,000+ employees and raising capital from investors like Sequoia, Meritech, First Round, General Catalyst, and Next47.

We talk how LLMs are changing hardware, the power of customer therapy, how Filip iterated on early startup ideas, why building hardware is cheaper and easier than you think, Verkada’s very difficult first funding round, how signing their first big customers changed the trajectory of the business, and how to think about adding new products over time.

We also talk about how you should evaluate joining a startup as an employee, Verkada’s commitment to in-person work in the summer of 2020, their “software zero” employee bonus policy that has a 40x ROI, and why they built a bar on their office roof.

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Timestamps to jump in:

• 4:20 Verkada, the physical security technology company + Demo!

• 11:02 Building software powered hardware

• 12:56 LLM opportunities in cameras

• 15:49 Filip’s lifelong fascination with photography

• 17:57 Taking one year to come up with the idea for Verkada

• 22:27 Building his own home security system to learn the $16B market

• 27:14 Why building hardware is cheaper and easier than you think

• 30:36 The importance of customer therapy

• 32:37 How to get your first customers, importance of “time to demo”

• 35:06 Why early fundraising was so hard

• 40:38 Verkada’s first big customer

• 42:23 How to decide what startup to join

• 45:45 The opportunity in “smart building tech”

• 50:34 How to launch new product lines

• 58:07 Re-architecting the security industry to be software-native

• 1:02:31 How hiring and managing a team changes as you scale

• 1:08:55 Why each team at Verkada has its own recruiters

• 1:14:00 Adding senior leaders to the team as you scale

• 1:17:06 Evolving from introverted engineer to CEO

• 1:21:59 Verkada’s cool office and focus on in-person work during COVID

• 1:28:12 Building a rooftop bar on the office

• 1:32:58 Verkada’s Software Zero employee bonus program with 40x ROI

• 1:36:00 How Filip thinks about IPO vs staying private

Referenced:

• Check out Verkada

• Open roles at Verkada

Follow Filip on LinkedIn

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Transcript

Find transcripts of all prior episodes here.

Turner Novak:

Filip, welcome to the show.

Filip Kaliszan:

Yeah, thanks for having me.

Turner Novak:

I'm excited for this, we're in your office right now. This is my first time doing this in someone's office. This is a pretty cool spot.

Can you just real quick tell us what Verkada is for people who aren't familiar?

Filip Kaliszan:

Sure. Yeah, at Verkada, we're addressing what I would call a very important problem in the world, which is safety. It's the safety of the physical world, it's the safety of the communities around us, and its safety of literally all the places that you and I and everyone else goes to every day. And we address this problem of safety through technology, specifically, we apply software and artificial intelligence to things like cameras, access controllers, air quality sensors, alarm systems. And we put it together in one simple unified platform, which enables the physical security personnel, the responders, to fundamentally do a better job of keeping people safe.

Turner Novak:

And so, I know we were going to do a demo. Can we-

Filip Kaliszan:

Yeah.

Turner Novak:

... real quick-

Filip Kaliszan:

Yeah. Let me show you-

Turner Novak:

See some of these in action.

Filip Kaliszan:

For sure. I think it's always the best way to show Verkada to someone is to just show them how it works. So, you're looking at our office on my phone, and actually let me start recording my screen so that you can show it to folks. So, you're looking at live cameras at the office. This is the front door where you came in, and the first thing you'll notice is we got the basics. The video is loading quickly, we're in my browser right now. So, this is not even the native app, we have a native app, but we're in a web view. It's loading, it's seamless, it looks good.

We automatically pick all the settings, the color quality. So, I'm a photographer, so I care deeply about image quality and I drive my team hard to make the images from our cameras look beautiful and choose the right lenses and sensors and so on. So, you're looking at live video, you'll notice some cool stuff as I scroll down below. These are literally the individuals that walk in front of the office. This person is prominent here, you can see they exited the office and they walked there. And you look at the next one, you're like, "Man, there's nothing going on here." There's actually a really tiny guy far away there. So, we doubled down on people detection, vehicle detection, being able to search for people in vehicles and it's amazing.

It just makes the work of safety personnel that much easier. I could look at a view of all the people who've moved in front of our office. And so now, these are images of all the individuals, for any one of them we could probably find you if we know which way you came in. But for any of these-

Turner Novak:

I came in that office. I came in from the-

Filip Kaliszan:

From the other side. Yeah.

Turner Novak:

From the other direction.

Filip Kaliszan:

Yeah. Well, so anyway, you get the idea, but for any of these, you could tap in, you could view that live video of that person walking. You can zoom in, you can send this clip to someone else. So, it just makes the work of personnel that's in charge of safety so easy, seamless. It's at their fingertips, it's on their phones, it's on the go. And then let me show you a couple of cool things we do as far as artificial intelligence beyond just people detection. So, we integrated in our search large language models. So, we combine a large language model with a large vision model. And so now, you can search for virtually abstract queries.

So, I could say, for example, show me cars made by Elon Musk, and hopefully that will show us some Teslas driving around.

Turner Novak:

Have you ever searched this before?

Filip Kaliszan:

I always tried to come up with a different query and it's always like, but I like real demos and you'll see it takes a little moment to produce the results, but-

Turner Novak:

Oh, there you go, yeah.

Filip Kaliszan:

... sure enough, we have a red Cybertruck, which is pretty cool. I know some employees have Cybertrucks, but not this red one. So, I don't know where that one came from, but you get the idea.

Turner Novak:

Man, that red Cybertruck is in there a lot.

Filip Kaliszan:

So, it must be someone who lives nearby or maybe it is an employee. But the cool thing here is we've made this query, and as I'm showing it's fairly generic, so I could search for garbage truck, I could search for, let's try people wearing safety equipment, the auto complete work there.

Turner Novak:

I could definitely see if I was working on some kind of public safety thing and it was a guy in a white hoodie did the thing.

Filip Kaliszan:

Exactly, that's the idea. It's a guy in a white hoodie that did the thing. You probably don't have his face and you have for many of our customers, hundreds or thousands or even tens of thousands of cameras that they're managing. So, this is just a better way to get to the starting point of where you might start the investigation. So, these are all people wearing what looks like safety equipment, and it's not always 100%, but it gets you the starting point, which is really neat. The other really cool thing about this is any of these type of search queries can be turned into a proactive alert.

Turner Novak:

Oh, interesting.

Filip Kaliszan:

So, these results, they're indexed in near real time. And so, I could now go into another aspect of our product, which is our alert inbox. And I could create, and I don't have any alerts set for this org right now, but I could create an alert that responds to a particular query and sends me notifications as those things happen. So, in our own office, we have actually alerts tied to the little retail shop that I showed you. So, I could show you how that works, this is HQ checkout. So, this is our retail shop and here you're seeing videos of all the transactions that happen in our retail shop.

And so, you can tap into one of them and you can see, yup, this person, you see they're transacting at the cash register and then we ingest the metadata. So, there was a discount, it was an employee and visitor discount, 20% off and they bought some gray sweatshirt or whatever in Excel side. So, here what we're doing is we're integrating with the point of sale. And so now, if you're a retailer, all of your video can be tied to all of your transactions, which is tremendous for our retailers.

Turner Novak:

What's an example of that? Why would I want to do that?

Filip Kaliszan:

Yeah, so let me give you a couple examples. High value return transactions. So, it turns out there is a lot of fraud around someone's returning a expensive bag handbag or something like that. And then the question becomes like, "Well, did they actually bring the bag back? Was the cash register person maybe on the scam and the bag got lost?" And that's a real thing that happens in the real world. It's like, "Yeah, we process this $4,000 return. Oh, the bag got lost. Where is it?" We don't know. So, with these kinds of integrations, you can have the store staff and the store manager see these things seamlessly on their phone in real time as they're happening.

And it's just awesome without having to who do a lot of work, they have visibility into what's going on and they can supervise these high-end transactions. That's one example of many that we would support as an integration.

Turner Novak:

Okay, that's pretty cool.

Filip Kaliszan:

Yeah.

Turner Novak:

I think I mentioned this earlier, but it sounds like the story of Verkada is just pretty big market with a lot of use cases. You can use cameras for a lot of things, but people just have not really done much with it with software. And you've basically made cameras that are very tied in software. And now there's probably a lot of opportunities with AI too and LLMs, it sounds like.

Filip Kaliszan:

Oh, 100% and I think that the story for our customers, it always starts with security. And it's interesting if you think about banks, retail locations, cities, parks, police stations, you name it, cameras are there. And so, I think the decision to buy cameras that exist and existed for a while, but what you can do with the system, the possibilities are super awesome. And we're seeing a lot of really cool use cases that come out of the fact that our solution is just so approachable and so easy to use and then more staff can safely interact with it and that's a big deal.

Turner Novak:

I could even see the retailer, someone comes in the store and doesn't buy something and you recognize who they are and you send them a text with a deal and they come back, I could see that working too.

Filip Kaliszan:

And so that's interesting, right? It's actually great that you thought of that type of use case because most people think of like, "Oh, recognizing people is always about catching the criminal." And indeed, we have some customers, for example, high-end hospitality customers where they will recognize the VIP, right? And so, if you walk into that certain location where you're frequent visitor, we can in certain locations, we could recognize you, we could prompt the manager to come greet you, give you a more personalized experience.

And that's an example of a great use case that stems from the security system, but it's not necessarily a direct physical security safety use case. It's a customer experience use case or a manufacturing or retail efficiency use case. So, those things are pretty exciting.

Turner Novak:

I feel like that ties into just all the opportunities with AI just in the real world. We've probably all seen, "Better Google," or some of the basic stuff, maybe making coding a little bit better. We know that's going to happen but there's a lot of opportunities where can you tie a large language model into the real world. And first big use cases might've been self-driving cars, but then it's also better customer experience or robots. I think we were talking about earlier, there's a robot that take ingest things in and does something based on what it sees. There's a ton of different ways that that's going to play out. So, it's an interesting space.

Filip Kaliszan:

And look, I'm fascinated about the progress. I think frankly it's a privilege to live in a time when so much is changing so fast. So, I'm like, "Embrace the change, see what it drives, and see what we can do of it." I love product design, I'm a product builder engineer by training. One of the things that fascinates me is just how AI will reshape how we interface with the computer. So, we're used to doing what I just did, which is tapping and clicking and moving around, but we're certainly at the cusp of, I can now tell the computer what it is that I'm trying to accomplish and the computer can accomplish complex tasks for me and just give me the answer.

And that is something that I'm very excited in the context of physical security, especially since if you think about this industry, there's actually a shortage of physical security personnel. So, physical security as in guards, first responders, it's one of the largest employment categories.

Turner Novak:

Really?

Filip Kaliszan:

And there's a shortage of labor of people who are willing to do these jobs and they are scary jobs. It's stressful, it's nerve wracking, you're responding to real situations. And so, I think the more we can make the technology seamless and it just works, it disappears and it makes that personnel better, more efficient, less stressed, more prepared for that situation, I think the better doubt comes for the world.

Turner Novak:

Yeah. And if you just give them better tools, if you think people, why do they want to work at Facebook or work at a company like Verkada is because you have cool stuff. Versus if you're working in security, you think of late nights in the streets, bad environment and then if you're in the back office or if you're the one behind the keyboard, it's in the basement hidden. It's not exciting, so giving them better tools actually makes that more of a fun job.

Filip Kaliszan:

Oh, 100%. And I think we often actually think about that when we design our products. When we design for that persona, it's like, okay, whether you're on the go or you're in the security operation centers and maybe you're watching the screens, how do we make that an engaging experience that's easy to interact with and help you accomplish that goal better?

Turner Novak:

Yeah. And I think going back to early days of your life, I know you have a pretty strong connection with cameras. When did that start?

Filip Kaliszan:

Well, so I've liked cameras for photography. So, even as a little kid growing up, my dad used to take family photos and I think, I don't know, maybe I was five or six or seven. But I remember we would sit together after a trip and back then it was film and you'd get the photos developed. And my dad was really good about only keeping and choosing the good photos and not keeping everything because you just get overwhelmed with-

Turner Novak:

So, this was in the film days?

Filip Kaliszan:

This was in the film days when I was a kid. And so, that I think was my introduction to photography. So, I began appreciating, okay, how do you frame a shot? How do you take a good picture and what is a good picture versus what is a bad picture? In high school, digital cameras came out and I think I always had a passion for computers and engineering. And when the digital camera came out, those two things combined. I started doing sports photography, which was highly technical and got really-

Turner Novak:

What sports?

Filip Kaliszan:

Everything. Literally every competition that the school would have, I'd be there shooting photos and I would give it to our school yearbook and then to the other schools that participated. And so, this was the first real way in which I utilized it. And then that passion actually continued through my college years at Stanford. So, I also shot sports at Stanford. And it was interesting when we started Verkada, initially the idea for Verkada was around video security specifically. Today we're a platform for physical security powered by software. But at the beginning it was just, "Hey, can we build a better software driven modern enterprise camera for kind of commercial buildings?"

And you'd be surprised, so much of the knowledge of how a typical camera works, lenses, aperture, focus, sensor, quality, noise all the way down, how does the encoder work. That intuition around that proved very valuable when we were designing our first product.

Turner Novak:

And then what's the story with coming up with the idea of doing an issue? I know you'd done another start-up that you sold to Chet. I don't know if that's part of the story normally, but how do you usually explain just the early days of getting into it?

Filip Kaliszan:

Yeah, sure. Look, so I'm a builder, I love building stuff. And I think concretely, I like building stuff that's useful to others. I get up in the morning because my customers are telling me that they're using my stuff or because I look at the metrics on one of our dashboard, you saw all the crazy dashboards all around our office, that is awesome for me. So, if I see that something I built is being used and driving value every day, that gets me out of bed more than anything else, that's who I am. And so, leading up to Verkada, we were looking for what to build. And I've had a little start-up before I sold it, as you said, to Chet.

So, I knew I wanted to start a company again. I was ready for that risk for that journey and I convinced some crazy friends to quit their jobs with me and work on ideas. So, we're working on a variety of things and I think one of the best things we've done, we actually gave ourselves a year of time to pick the right idea. And we worked on a variety of different things and about six months into it, we came across the video security sector specifically in enterprise.

Turner Novak:

So, I'm curious, just to jump in and make you go a little bit deeper on that. How do you recommend that somebody explores ideas? Because it sounds like you didn't know what you were going to do, but you wanted to do something.

Filip Kaliszan:

Yes.

Turner Novak:

So, it almost sounds like that could be an unstructured process, maybe-

Filip Kaliszan:

Somewhat.

Turner Novak:

How did you do that?

Filip Kaliszan:

Yeah, so I think you have to have a level of self-discipline and commitment and maybe set some guardrails around it. So, what I did concretely was I think it was the end of 2015, beginning of 2016. I had quit my job, I've convinced another buddy of mine, one of my co-founders, to quit his job. And we told ourselves, "Look, we'll take one year and in one year either we will come up with an idea and incorporate a company and go after it. Or if we don't find, then we'll go back to the market and apply for regular jobs," if you will. And that year constraint was, in our case, it was dictated by our financials. That's how much time we could take without being employed with some savings.

And then the next thing we did from there, which I think it was very counter to maybe the first time around when I did my first start-up, was I think at that point in life, I realized that a lot of what you build as a company, it's about the execution. So, people always think, "Oh, it's the idea and the idea has to be secret and don't tell anyone." I think for us it was the opposite, it's going to be execution, ideas are valuable but it's how you build it and is it the right idea for you, the founders. So, I think one thing we did well was we were just very open. We would work and think of different ideas. We would tell everyone about them, our friends, our advisors, anyone we knew in the business space or venture investors.

And then one thing leads to another, you explore one idea, maybe it's good, maybe it's bad. And throughout the process, we try to be very disciplined in terms of getting together every day, putting in 10, 12 hours a day, working on stuff, building prototypes. And we built a couple of things like everyone else, I am a photographer, so of course one of the first thing I did is I build a photo sharing app, of which there's a million on the internet.

Turner Novak:

And this would've been in like 2013?

Filip Kaliszan:

2016.

Turner Novak:

Oh, 2016. Okay.

Filip Kaliszan:

'16, yeah. This is leading up to the start of Verkada. So, it's like, okay, yet another Google Photos Instagram type app, which we actually built something somewhat cool, we got maybe 100 friends using it. And then we're like, "Ah but it's a very competitive space." But the cool thing about it was in doing so, we refreshed all of our memory and stayed on computer vision and that actually then became a building block to Verkada when we started talking about cameras in the commercial space. So, I think it was time very well spent. I would actually highly recommend that approach as a give yourself time, give yourself space, explore a couple ideas, maybe go deep on a few ideas, and then feel okay to scratch them.

If it doesn't make sense, or if it's too competitive or the market is not the right one, move on to the next idea. And that's how we landed on Verkada about six months into that process.

Turner Novak:

And you specifically, you landed on security as a market.

Filip Kaliszan:

Right.

Turner Novak:

So, I think if somebody, maybe at the time 2016, if I were to hear somebody say, "I'm starting a company in the security market," I would just say-

Filip Kaliszan:

Physical security.

Turner Novak:

Yeah. Physical security, I'd think, "Huh, that's interesting, good luck."

Filip Kaliszan:

Yeah.

Turner Novak:

As an investor I might say, "Ah, not the most exciting on the surface." So, what was it that made you really say, "Okay, there's a big opportunity here?"

Filip Kaliszan:

Yeah, so it's funny because I think exactly what you said is exactly what happened.

Turner Novak:

And maybe we can tie the fundraising story into this too.

Filip Kaliszan:

Right. So basically, here's how it goes. I am a nerd, so I have all the gadgets in my house, I love them, and I play with all the toys, so to speak. So, I have my Nest Cams, my Rings, everything from an air quality sensor to a sleep tracker to whatever. And all those things were becoming ubiquitous and cheap and easy to use around that sort of 2014, '15, '16 era. And those products are good, frankly, they're great and they're awesome to use in your home.

Turner Novak:

Yeah, Ring's amazing.

Filip Kaliszan:

Ring's amazing, Nest's amazing and it was initially Dropcam that I remember having. And so, I think those types of gadgets like paved the path. It's possible to do really cool stuff and I think as a software engineer, you quickly realize a lot of the reason those devices are cool is the software experience around them is amazing and it's leveraging what we then called computer vision and now a lot of people would refer to as AI, but these types of techniques. And so, that's a thread that was going in my head. And then one of my co-founders, Hans and I had experiences with commercial camera systems in different settings.

So again, being a nerd and a person who likes all this stuff, at some point I decided to put in a commercial grade camera system on my home. Not because I felt unsafe, but because I just wanted to check it out.

Turner Novak:

Yeah. It's a cool thing to just install and set up and then use. It's just fun.

Filip Kaliszan:

Yeah, exactly. So, I was remodeling my home after I had a pipe that burst and I had some flooding, so I had to remodel my place and I'm like, "Ah, I'm going to run ethernet everywhere, might as well put cameras that are on POE so they're always powered." And so, I put a camera from what is now one of our competitors, and to my mind it was going to be the coolest thing, it was much more expensive than the Nest and the Ring. And then I have it and it's like, "Wait a minute, now I have a Windows server on a rack that I have to manage. I can't access it on the go on the phone, it actually kind of sucks." It wasn't a great experience.

And then my co-founder, Hans, he had at his previous company an experience where they had gotten one of their offices robbed and they had a commercial camera system and they literally couldn't pull the footage or the camera's footage was missing. So, it was top of mind from those two stories. And so, you combine that with the fact that the consumer solutions are getting cheaper, awesome and better, and seemingly all that's coming from software. And so, those two things drove us to start researching the market, going to security conferences, calling anyone who would pick up the phone and asking them, "Hey, so what do you use for your security system? How does it work? What do you like about it?"

All the way to pulling market reports and market studies. So, through the process of couple of weeks of these types of conversations, we had this realization that the market for physical security is massive. Video security alone was a back then a $16 billion per year global spend category.

Turner Novak:

And is that mostly people paying for cameras that they would install?

Filip Kaliszan:

Correct. Yeah, it's like the cameras, the video recording systems, some services around it, but that universe, the world spends 16 billion every year. A lot of it is frankly, actually replacement of cameras in the world. So cameras break on certain cycle. If you add up all the buildings in the world, about a fifth or sixth of cameras in the world get replaced every year. So it's a five to seven-year life cycle for these devices typically. And so that's that $16 billion spend category. And so now you're sitting in my living room with my three co-founders and you're like, the world seems to spend 16 billion a year. That seems like a lot of money compared to the zero that we have right now.

Turner Novak:

There's an opportunity there.

Filip Kaliszan:

The consumer devices are really cool, so it's totally doable. We're not inventing something that is maybe impossible to build. Oh, and you look at know what exists in the market as far as competitors and you're like, we think we can do this. Right? And so that's how Verkada started. I think the emphasis and focus was really on, how do you quickly build the software that differentiates the solution? And that's how we got going.

Turner Novak:

Then how did you just experiment and iterate with that first product? Because it's hardware. I mean, that's most... I think that's probably another reason why investors were like, "Not for me. I don't invest in hardware." A lot of founders say... I mean, I think today actually, I feel like the narratives changed a little bit, but 2016, hardware's hard. The word hard is in there. How did you go from coming up with this idea to experimenting with it and actually having products that worked. What was your process for doing that?

Filip Kaliszan:

Right. It was the first time I had built hardware of any kind. And so that part was tricky for me to overcome. And actually Hans, my co-founder was great, his experience building Meraki, which was a hardware software company, was fantastic here because he's gone through the journey. He knew how that happens and frankly he demystified it for me. So that gave comfort to me and the rest of my early team that we could do it. What was interesting to me was, I'd always imagined that with hardware you have to be very thoughtful and the cycles are slow and some of that is true.

Turner Novak:

There's a big CapEx investment on the inventory.

Filip Kaliszan:

There's a big CapEx, you think, right? But I think very quickly we realized that actually you can iterate very quickly on hardware. And I think that probably wasn't true 15 or 20 years ago, but in 2016, it truly was very quickly. You could get boards of the shelves. We used raspberry pies to build the first prototypes on and you could actually move pretty quickly. So that was a very positive, pleasant surprise.

And to give you a data point, we work with joint design manufacturers in Asia to build our stuff. At the beginning, it was in Taiwan and later now, it's Taiwan, Vietnam, Thailand. But our first two cameras, from it doesn't exist to it's in a box that has a Verkada logo that has our basic industrial design, that took a year to build. I think the total expense on tooling for those two first models was like $120,000. So it's not like this insurmountable amount of money or project. It actually turned out like, well, if the hardware you're building is not so complex and you're not inventing an Apple Watch... That is hard to do. There's crazy constraints, power, whatever. You're inventing a lot of new components. In our case, we're essentially building from components that existed, right? We're choosing the right sensor. We're choosing the right optics. We're choosing the right microprocessor. We're having someone assemble that in a thoughtful way. That turns out you can iterate pretty quickly on, and that proved to be true for many of the products that we've built over time.

Turner Novak:

Yeah. And when you say it took you about a year and 120 K that's comparable with just the software categories of the day. It took us a year to build it and we spent X amount on our salaries, the engineering team, designer.

Filip Kaliszan:

Yeah. I mean, I think it was the expense on the tooling and the initial builds of the hardware was not disproportional to any other company expenses, if that makes sense. And that worked well for us.

Turner Novak:

You have this notion of customer therapy, customer obsession?

Filip Kaliszan:

Yeah.

Turner Novak:

Maybe that gets into another phase of this conversation of just how did you understand what the customers wanted? What was that process?

Filip Kaliszan:

I think for me a big way of understanding of how customers use the device is just being a customer of our own product myself. So that's one of the things I do obsessively. I use Verkada in my home, in our office all the time. Actually, it's funny, internally, we look at metrics of who uses Verkada the most and I'm on the leaderboard of the employees using Verkada.

Turner Novak:

Oh, nice.

Filip Kaliszan:

And by quite a big margin to the next user.

Turner Novak:

Really? Okay.

Filip Kaliszan:

Yeah. I clock in something like over, I think it's over a thousand minutes of Verkada use per month, which is pretty awesome. I mean, I pull it up on my phone all the time.

Turner Novak:

Yeah, well, you just got like five more minutes earlier.

Filip Kaliszan:

Yeah, you just got five more minutes during the demo. But I think using it obsessively and caring about the details is part of my DNA. I love doing that. You mentioned what I jokingly call customer therapy. We joke that whenever things go sideways, which something always goes sideways, you have COVID, you have the supply chain crisis, who knows what's going to happen in the world, we love talking to our customers. We talk to our customers and they emphasize how we've solved this or that problem. And every customer tells you something slightly different and it's just awesome. It gives us energy. It makes us go work harder, build more. And so that's this concept of customer therapy, which we talk about, which is they just give us the energy. When things go sideways, if you pick at random and call one of our customers, sure, they will always mention one or two bugs. That's great actually, because that's awesome feedback. But overwhelmingly, they're like, "Man, you've really moved the needle forward. It's awesome and we're so excited to be using Verkada." We're like that is the best possible motivation to keep going and keep building stuff.

Turner Novak:

So you took you about a year to get the first product that you said with the Verkada logo on the box, you're shipping it to someone. How did you get the first customers? What was that sales process like and what was the market like at the time? We maybe alluded to a little bit, but how did you slot in and convince somebody to use it?

Filip Kaliszan:

It was hard, honestly. At the beginning, I remember we actually launched our product and we didn't have any product marketing yet. If you went to verkada.com, it literally said we're building something cool. It was like a placeholder.

Turner Novak:

That's what it said.

Filip Kaliszan:

It was like a Squarespace type of-

Turner Novak:

So it didn't even say cameras or security?

Filip Kaliszan:

No, no, no. We're building something cool like, who are you? And then maybe had a link to our LinkedIn or bios or whatever. And we hired our first two salespeople and they're calling people and telling them about cameras and security. Invariably everyone comes to our website and it's like, are you a real company?

Turner Novak:

Yeah. You think it's like a scam?

Filip Kaliszan:

Yeah, almost. Right? And what was interesting is for the first few weeks, probably first few months, those conversations were really hard because you don't know what to say, you don't know how to pitch it, you don't know how to position it. But you quickly start realizing that there is a very large commonality of problems that people faced with their security systems, which happened to be the same problems we set out to solve with our product. When you start talking articulately about those problems, folks are like, the light bulbs start going off and they're like, "Oh, maybe I will take a risk. Maybe can you send me a trial?"

And so the next big thing, and it's true to this day for us, became let's get our product into the customer hands as fast as possible. Even in our conversation today, 40 seconds into it, I pulled out my phone and I'm showing you how the system works. Same directive for our wholesale team. If you get on the call with the customer, maybe ask them about their use case and then flip to the demo, right? Show them how the system works, show them what it's capable of. And that's what gets people excited.

And from there, it typically goes demo, trial unit, will send someone one or two cameras. They might put it in their office, they might put it in their home, doesn't matter. As long as it's plugged in, it's a huge buying sign for us because invariably they'll like the technology and they'll start thinking of cool things that they can do with it, right? And so that's how the sales journey goes for us.

Turner Novak:

That makes sense. And we alluded a little bit earlier that fundraising was not the easiest in the early days.

Filip Kaliszan:

Yeah, it was brutal. In the early days, it was really hard.

Turner Novak:

Yeah. So how did that go? Because from what you described, I know we didn't even talk about this, but one of your co-founders, Hans, he was the co-founder of Meraki, which was acquired by Cisco, was it in the '90s, late '90s?

Filip Kaliszan:

I think 2012 maybe. Yeah.

Turner Novak:

Oh, 2012.

Filip Kaliszan:

Couple of years prior. I think 2012, right around then.

Turner Novak:

So he was fresh off an exit.

Filip Kaliszan:

Yeah, they sold the company. They've been there for a few years and he was looking, okay, what is he going to do next?

Turner Novak:

Yeah. So on paper, you guys seemed like pretty stacked team, I feel like.

Filip Kaliszan:

Oh, yeah, we felt good and we felt like we found a good idea. And in fact, we were so bullish on it that initially, we put some of our own money into the business and we thought maybe we can skip the seed round and go straight for an A round. And then we proverbially got our butts kicked when we started raising money and what was going to be a series A became a series C. And even that was a hard process.

I think the challenge people had was, one, they looked at this market and they're like, this is a boring market. Which is sort of the comment you made earlier. People weren't talking about physical security in 2016. We were talking about self-driving cars and virtual reality and SaaS this and SaaS that. And Philip, why aren't you building a SaaS, whatever software for HR, whatever? Name your topic, Philip, you should build some other SaaS thing for something, right?

Turner Novak:

Yeah. You were in an unsexy market and you were still in the era of hardware. It's just like our do not touch. I feel like. It's an automatic. We're not going to invest.

Filip Kaliszan:

People were allergic to it. Right?

Yeah.

Turner Novak:

So that was a problem. I think the next problem was, there's been a graveyard of startups within the video security space who've tried to build some kind of retail analytics products or like, "I'm going to count people coming into your store and give you some data." And while I think many of them were actually good ideas, what we realized is that a lot of the buyers, the budget they have is for physical security. And so these retail analytics type use cases, while they're demanded in the market, they're the nice to haves. It's not the bulk of the expense category, right? So we had the pitch of like, we're going to go to the customer, we're going to offer them the physical security solution, which by the way, they need. And here's the proof that the world spends $16 billion a year on that stuff. And of course we'll layer all the analytics on top of the platform. But folks looked at it and they were like, "This is not that exciting. It's high risk," to your point, "It's know it had a hardware component," even though I think, the majority of the differentiation is truly in the software.

So yeah, it was a brutal fundraise. I'm an optimist. I think you have to be an optimist as a founder. So I joke I'm a glass half full or two thirds, whatever, the world is.

I know the word is. Yeah.

Filip Kaliszan:

I'm optimistic. I'm positive. I believe in the good things will happen to people who work hard and so on. I remember this very dearly. We were I think maybe 10 or 11 employees by the time that we had put in some of our money and moved into a tiny office in San Mateo. And every day, I would go to Sand Hill Road, go to do a meeting or two and I would come back from the meeting and I'd be, like, oh, it was great. It's like everything was good. And invariably, every one of those days, my team would look at me 15 minutes later and they're like, "Yeah, do we have a term sheet?" It's like, no, we don't have a term sheet. I got a nice water bottle, but no term sheet.

Turner Novak:

Nice water bottle?

Filip Kaliszan:

I mean, we had jokes about it. We had like, which VC has the nicest water? Because that's literally all I came back-

Turner Novak:

They give you an AirPods case and some soap.

Filip Kaliszan:

Yeah, exactly. It's just like a polite way of saying... I think what was astounding to me for two, three months was it wasn't just like, "Hey, Philip, this is idea is not so good. So here's a term sheet and it's not such a good term sheet, but there is a deal to be had." It was like this idea is so bad that we're not even going to consider giving you any money.

Turner Novak:

Yeah. Like we're not even trying to just low ball you. We don't want anything to do with it.

Filip Kaliszan:

We don't want anything to do with it because it's just this gross, weird market that we're not used to and it's an outlier. So we navigated that. That was definitely a crucial existential moment for the company where, we literally almost run out of money.

Turner Novak:

Well, so then how did you get someone to actually give you money? Was there a certain moment or change to the pitch?

Filip Kaliszan:

Yeah, there was a couple of things and I think the tides definitely turned for us pretty quickly thereafter, but the couple of things I'll share there is initially we had to turned into our friends. So we were like, well the professionals told us no, and so let's look at our friends and see if someone will fund the company. So that's how we survived that moment in time. And then I think we realized, okay, we have to make the pitch better, and some of that was on me. I was very excited that I built a camera and I had some hardware in boxes. I would bring my camera to a VC meeting. Don't do that.

Turner Novak:

Oh, don't do it. Oh, really?

Filip Kaliszan:

Yeah. Pull up the dashboard, show the software. That's a much better way to start the conversation than putting a box with a camera on the table, which frankly looks like every other camera in the world. So I get it.

Turner Novak:

Yeah. You frame it as the hardware and not as the software.

Filip Kaliszan:

And I think that's actually the key is how do you frame the conversation. And even though, probably nine out of the 10 slides in my deck were software and computer vision and all of that good stuff, people looked at us and they were like, "This is just a boring commodity hardware company." But then it turned around, right? And I think the way it turned around, which was fantastic, we brought the product to market. The demand from the market, after that first few months of figuring out the sales pitch, went as textbook as beautiful as you could imagine, right? So, $1,000 deal, a $5,000 deal, $10,000 deal, $50,000 deal. I think three, four months into it ,we're on a Zoom call with a customer and they're like, "Yeah, we need 1,000 cameras and that's going to be like $950,000." I'm like, "Well, I only have 250 in my garage, but we're going to crank up production."

Turner Novak:

Did you tell the customer that, or were you like, "We're in doubt. We're good"?

Filip Kaliszan:

Had to work it out.

Turner Novak:

Okay.

Filip Kaliszan:

Fortunately, we had the capability of increasing our order size and had the flexibility. So we're actually able to fulfill that order. And that customer is a customer to this day. It's a school district in Arizona. But it was just this awesome inflection point. And of course that then turned the tides of fundraising and we know became a company that was on the radar of many people. And so then we had a very good series A, series B, series C. We had Sequoia, Meritech, very well-known folks join the journey. And that definitely gave us validation, some comfort that okay, actually the idea wasn't so terrible.

But then actually where it really mattered, and this was maybe obvious in hindsight, but not obvious to me at the time, getting that validation was very important, not just for us internally, but for hiring. So if you're a startup and you're doing well, your biggest limiting factor is, how quickly can you bring competent people, train them up and help them know drive your mission? And so that series A, series B, quick validation series C, that journey really helped us access a much broader pool of excellent talent in the market, which was necessary to then take this company through the crazy growth which occurred over the next few years.

Turner Novak:

Yeah, because when someone's looking at joining a startup, just at a very high level, I feel like the, I don't know, stigma or the meme around startups for the average person is, oh, it's risky, right?

Filip Kaliszan:

Oh, 100%.

Turner Novak:

And if you're, let's say your parents immigrated and they brought you to the US and you got into a good school and they're like, go become a lawyer or a doctor or-

Filip Kaliszan:

Get a good job.

Turner Novak:

... work at a management consulting or big tech versus a startup, it's like that can actually be really hard to not just the individual, but also the people around them to say, "Are you sure you want to work at this risky company?"

Filip Kaliszan:

Well, I think actually, probably if you looked at it statistically, joining a startup as an early employee, probably on average is like a wrong decision because many of them fail and you're not going to get paid well. So you have to love it for the journey, the work, the learning, something else. Financially, probably on average, it doesn't work out, or the typical story doesn't work out. I think it's rational that getting external validation, getting more funding is what then gives you access to better hiring and labor market.

Turner Novak:

Is there anything that you've found works well, maybe advice for other founders, but then maybe this is a pitch to somebody that's listening to this, it's like considering working at Verkada? But what do you say a lot of the times to just convince people like, hey, Verkada is the right place, or Verkada is a good opportunity?

Filip Kaliszan:

Well, I mean, I think it's evolved certainly and changed over time.

Turner Novak:

So how's it evolved, early days and then all the way to today?

Filip Kaliszan:

Yeah, yeah. I mean, look, I think the unifying theme, which I talk to everyone about is just join a place that grows quickly. And I think the reason for it is not just financial. I think the reason for it is if you join a company that grows and compounds quickly, the growth of that company will most likely outpace your personal growth, which is a good thing because it's just going to drag you forward in life, right? The company will throw harder problems at you. You'll have less support to solve those problems. You're going to have to do more work. You're going to have to work harder. Your brain is just like any other part of your body. If you exercise it, it gets better. If it's stagnant and your job is easy, it atrophies. So that's what I think.

I like telling this to people because it's also a great selection criteria in a sense, right? There's folks that this is compatible with their lifestyle and there's folks for whom it's not compatible. And that's totally fine. But I think if you are joining a early stage company or a high growth company, one of the benefits you're getting is the learning and the crazy experiences you'll get access to. And so I think that is a must discuss hiring criteria and it also offers that perspective to the candidate.

Turner Novak:

One thing I think is you've done a really good job at, I believe you said there's five major product lines at this point.

Filip Kaliszan:

Six product categories.

Turner Novak:

Six, okay.

Filip Kaliszan:

Yeah, it's hard to keep track of them. And I know all the ones that we haven't released. The numbers is fluid in my head, but...

Turner Novak:

What do you think how big do you think you could get eventually? 50, 20 hundreds? How are you thinking about that?

Filip Kaliszan:

Let me give you the theory behind it, behind the madness, and then I think it'll maybe make sense. We started the conversations by talking about the $16 billion video security enterprise videos or commercial video security market. I think to give you a good intuition about Verkada and the markets we serve, we build products that protect physical places, buildings, parking lots, that kind of stuff. And so I think a good proxy for how much Verkada does the world need is the number of buildings in the world, right? So where there's buildings, there's a need for Verkada. And generally we think where there's GDP, there are buildings. And then how fast do buildings appear in the world? Well, approximately at the rate of GDP.

And so why am I sharing this? Well, if you deduce from that, the number of buildings grows with GDP, the ultimate growth rate of those markets is not that fast. So 16 billion felt like a lot when we were in my living room and we had zero billion. Now we're selling high hundreds of million per year. I think it's very easy for me to see how over the next couple of years, if we were just in video security, we're now a meaningful part of that market. And hey, I want to keep growing the company at 30, 40% a year. That's what makes the business exciting. The number of buildings in the world and the size of that market is just not growing fast enough to sustain that for the next decade, let's say. Right?

And so, therefore, like one of our strategies in the way we think about the long-term is, okay, we have to create more opportunities of things we can bring to the world and hence our adjacent product categories, right? So we went from cameras to access control, to air quality sensors to alarm systems, so on. And each of these adds yet another market and yet another category that we can sell to. Today, the six products that we have address about a 55, maybe $60 billion per year spend. And the way we think about the company is as time goes on, we'll add more categories. We'll bring all of these systems into a unified single pane of glass software experience. That's by the way, what the customer wants and dreams of. And that's how we're thinking about maintaining the growth of the overall business for years to come.

Turner Novak:

Yeah, because when you say GDP of buildings, it's like anything on a building you could sell to the owner, but you have these customer channels that are already built. It's like they're buying the camera security. They're buying access to like get into the building. They're paying for controlling window shades or intercom air conditioning units, anything that makes the building. I think there was a SoftBank company that did a spac, and I don't know if it exists anymore, but it was like smart window panes. Do you remember this company?

Filip Kaliszan:

I don't remember it, but I'm sure like every variant of smart building tech existed at some point.

Turner Novak:

Yeah, it was actually a fascinating company. The deck, it was like a smart window company and the TAM was a trillion dollars because every building has windows and you can control the window, but it's actually in the context of maybe it is like fully developed company and product, it's like, can you sell Windows that actually have better technology or something? It's an interesting place to go.

Filip Kaliszan:

I think the way we think about it is think about all the infrastructure that maybe hasn't been modernized, and for us focused around physical security, that's certainly the initial focus. But if you think about video security, if you think about access control, if you think about alarms, those are three great examples of things we do. Shockingly, from 2016 and even today in 2025, most of those systems are on-prem. They're not remotely manageable. They're hard to manage at scale. There isn't a provider in the world that unifies all of them seamlessly. There isn't a provider in the world that can deliver a unified solution to a company that's a multinational around the globe. And so we see that as an opportunity. We put these systems together. I think we have no doubt in our mind that the customer has the desire of all of these things working seamlessly together working well, and then, of course, we can do it globally anywhere. So those are core advantages to I think, our solution versus what's out there.

Turner Novak:

How have you decided what new products to add? At what time? Is there a good way to think about that? If I'm running a company, I'm like, okay, I got this one product works really well, a bunch of places I should go. I think you guys did access controls for the buildings a second. Maybe explain that product and just how you thought about how you should go about adding a new one.

Filip Kaliszan:

Look, I mean, I think how you should go about it or whether you should even go about it, I think it very much depends on the category you're in, right? So again, I think for us it makes sense because it adds additional markets and it allows us to grow for many years. Arguably, if you're a single product company in a giant market, don't distract yourself from that, right? So maybe that's the first question to answer.

Why and how we thought about it at the time was we were pulled by our customers into it. So we were building cameras and the customers were loving that product. And I think even more importantly, loving the command platform, which we were offering them in software with it. And they wanted to tie our system to their access control and other parts of their building, frankly. And so that customer demand pulled us into access control. And then we said, "Oh, okay, cool. First maybe let's try to integrate with what you have," but then very quickly we realized that the existing access control solutions suffered from some of the same problems that we discovered in the video security space.

And so that's where we started thinking maybe we should actually build a first-party solution for access control," which is the system that opens doors and scans badges. And that was the beginning of that platform strategy for Verkada, right?

So, we started working on this product. Around that time I was raising the Series B and then quickly thereafter the Series C. And so I began experimenting with telling the story of Verkada is not just a video security company, we're going to build the platform or operating system for the physical space. All of these devices will be tied together with software and AI and that will create better results, so that's kind of how we got dragged into it.

And fast-forward to today, certainly we've realized that vision, so a couple of cool things I'll share with you. More than 70% of my customer base uses two or more of our product solutions.

Turner Novak:

That's good, you were at 60% not that long ago.

Filip Kaliszan:

Yeah, not that long ago, so we keep chasing this metric. So we look at the number of customers who use two or more products, and that's a key metric.

And actually, if you look at three or more, four or more, even some that use six, all of those charts are kind of following really nicely, which is cool.

Turner Novak:

That's got to be the holy grail, is you get a customer and you expand it using all the product suite. That's got to be...

Filip Kaliszan:

100%, right?

Turner Novak:

Yeah.

Filip Kaliszan:

And it's so awesome for the customer because now they have complete visibility and the best control over their space and building, and it really drives meaningful outcomes in the world.

So, to give you an example, we work with a community college here in the Bay Area, actually in San Jose. So they deployed Verkada cameras and access control and lockdowns, literally if there's a situation you need to lock down a building, the procedure to make a lockdown happen used to take on the order of 30 minutes.

Turner Novak:

Oh, wow.

Filip Kaliszan:

Why? Well, because you needed to check this, check that, then maybe you have disparate access control system, multiple people have to command them. And so, we've reduced that to single digit minutes, which is amazing because now you can very quickly react to a situation that's unfolding and certainly prevent certain types of activities or people getting into dangerous situations.

So, I think it's both the dream of the customer for these systems to integrate together, but then also, in those cases where we do integrate them together, the outcomes and the use cases are super awesome. And it's really cool to see it all inter playing. And I think if I think forward about Verkada for the next five, seven years, I'm excited about adding new adjacencies, new product categories, so that's definitely one area I spend time.

The power of computer vision, AI, all of that functionality, I mean, it's definitely crossing this level where it's now real, it's driving real use cases, it's very accurate and it's going to be super powerful. And then last but not least, you tie all of these things together, they seamlessly work together and that's what drives these awesome outcomes and the use cases.

Turner Novak:

Yeah, if I just go back to the demo that you showed where I could probably search if I was looking for, a certain event happened, I need to bring up a certain piece of the footage, and I've just heard, you think about using a VCR with tapes and it's like, "We need to go to this specific moment and find this one thing."

You physically have to fast-forward and watch. And yeah, maybe in some cases you can't fast-forward because it's such a small detail.Versus with software, you can literally say specific thing, use the LLMs that will search for it, pull it out, and here's a specific moment in the two hours of footage and you got it in five seconds.

Filip Kaliszan:

Yeah, and I think, look, we're at the point where I think actually in many cases computers are much better at certain detections. So if you played you a video feed, and actually I think I showed you one in the demo where the person was just tiny in the distance?

Turner Novak:

Yeah.

Filip Kaliszan:

As a human, you might not notice that, but the computer will detect that, so I think we're right at the border of computers are better at spotting people in vehicles in a video feed than an ordinary human would be, which is cool, particularly because that task is also very tedious.

Turner Novak:

Yeah.

Filip Kaliszan:

You don't want your security personnel to necessarily be just sitting there and watching video and nothing's happening in the video. They can be more efficient, they can be more useful, they can be going to address situations around the building, so that's kind of the idea of a lot of what we're doing.

Turner Novak:

Yeah, and then, who is the actual, the customer, the person that's buying this? Is it the facilities manager or...

Filip Kaliszan:

So, it varies. There's different personas of customers that buy our product. I would say that because the systems that we sell ultimately are connected to the internet and live on the network, in most cases IT is involved in some capacity because it's now a widget on the network that they have to manage. In some cases IT is actually the buyer, and in some cases it's more traditional like a facilities buyer. Think of even in retail for example, it's loss prevention, so there's a specific role that's focused on things like shrinkage, how much product are we losing?

And so, there'll be a dedicated function to that. So there's sort of a handful of personas, I think to give you the high level advantages, if you're an IT buyer, you really like Verkada because it's simple, it looks and behaves like any other modern IT widget you have. You can manage it at scale. It's easy to configure and navigate through the cloud.

If you're one of the operators of the system or a physical security personnel, guard, loss prevention type of person, the simplicity of use and the usability of the product really comes in handy because these folks have a lot to do. And again, it's a stressful job and we just provide a tool that lets them do that job better so they fall in love with the solution quickly.

Turner Novak:

Yeah, was there a pushback at all initially back in 2016, '17, with the cloud, using smarter products?

Filip Kaliszan:

Yeah, absolutely. Well, I was actually astounded by it because if you think about it, in 2016, what isn't in the cloud? Literally most software is cloud-based, and that transition sort of happened a decade earlier.

So, I think for us it was a little bit shocking that so much of the physical security infrastructure lived on premise and we didn't quite understand why.

Turner Novak:

Did you end up understanding why?

Filip Kaliszan:

Well, I think the best answer I have is I think our competitors and folks in this space, they evolved as hardware companies, so fundamentally their DNA was hardware and they got very good at it. They built more models of cameras, and you can buy anything from HD to 4K, 8K, bombproof, gas proof, leak proof, underwater, you name it, it exists, right?

Turner Novak:

Yeah.

Filip Kaliszan:

Anti-ligature. So, they build this fantastic portfolio of hardware solutions to the problems they were solving, but I think their businesses over the past couple of decades, they evolved around that capability, so they got really good at that.

Turner Novak:

Yeah, they were built pre-internet almost.

Filip Kaliszan:

They're built in the... Well, I mean, maybe you can actually say that because I think a lot of it was actually back in the day called CCTV, right? Closed circuit television, it was on its own network. I don't think it's maybe fully fair in that.

Turner Novak:

I'm being a little critical. I can say it, you can't say it.

Filip Kaliszan:

Yeah. And I think largely, I actually admire a lot of what our competitors did. Their hardware is pretty good. And I think if your DNA as a company for 20 or 30 years was getting better and better at hardware, it's hard to take that ship and turn it and now say, "Hey, I'm going to build beautiful consumer level design software with simplicity in mind that works on the go. Oh, and it leverages literally the latest AI advances." It's hard to take that team and shift into that gear.

Turner Novak:

Yeah.

Filip Kaliszan:

And I think to really make initially video security and then more of the broader industry cloud-based, it required a pretty deep re-architecture of the system. So I think a lot of people tried to say, "Oh, everyone's moving to the cloud. Yeah, we have the cloud too." And so they put it in their marketing materials and they built a fairly simplified or maybe naive implementation of that and I think the result was it just didn't work well for the customer.

And we had the benefit of starting from a blank piece of paper. We were starting the company in 2016, so we could really, from the ground up, think of what it means to build a cloud native product, cloud native camera. How is it going to store the video? How is it going to manage bandwidth? How do you deal with 1000 cameras in a rural location with a limited connectivity or a Starlink connection? We do all of that. The reason we can do it is we designed for it from day one, and I think that became a big differentiation.

Interestingly, and this is cool, one of the things I'm proud of eight years later, we're now the leader in cloud video security. So, if you look at market share of cloud video security, Verkada has, I think, 30, 30 some percent of cloud video security, and we're trying to do the same to the broader physical security market. Let's just take these things, make them cloud managed, power to move modern software, power it with AI and the latest advances and give customers the benefit of the super rapid iteration. That's kind of the recipe.

Turner Novak:

I feel like there's analogies today with AI native companies or somebody who has legacy software.

Maybe legacy is not a fair word, but more mature software and like, 'Oh, we're slapping a ChatGPT search feature." Or, "We're putting an agent, an AI agent in it," or like a chatbot or something.

Filip Kaliszan:

Yeah, I think, look, there's a lot of products out there where they're trying to put cloud on top of it. That was 10 years ago, now they're trying to put AI on top of it. And I think we're trying to be thoughtful about all of these changes in technology and build it in a native way where it actually serves a real use case in a valuable way to the customer as opposed to just being sort of a buzzword or demo candy.

Turner Novak:

Yeah, so then, what were some of the biggest challenges as you started scaling? I think you've described it as different areas of the company, from 20 to 200 employees, 200 to 2000 employees, what are some of the big things that stand out as biggest challenges you had to overcome?

Filip Kaliszan:

Sure. So, I mean, look, I think when you're a startup and you're 20 or 30 people, effectively what happens, at least that's what happened in our case, everybody thinks your idea is crazy and bad and maybe won't work.

And so, effectively the people who work for you are acquaintances, friends, people you've worked with before, so there's an inherent level of trust and connectivity among the initial team.

Turner Novak:

And probably belief in the mission.

Filip Kaliszan:

And belief in the idea. Everyone's bought into the risk and they know what they're signing up for.

Turner Novak:

Yeah.

Filip Kaliszan:

And that's cool and very valuable in that you can move very fast and you don't have to have very much management overhead or... When we were 20 people, we didn't need to have an all hands meeting. Everyone knew the full state of the company all the time at all times.

Turner Novak:

Yeah, you're just all sitting in the same spot.

Filip Kaliszan:

We're all sitting in a room that was this size.

Turner Novak:

You were in your house for a while.

Filip Kaliszan:

Yeah, we were in my house for a while, so we cooked meals together. It's like you're just 24/7 together and everyone understands what's going on.

So, I think that was one of the big shifts, which, I mean, frankly, I screwed it up a little bit as we went from 20 to 200 people and I had to adjust how I work and how I work with the team, which was-

Turner Novak:

What were the biggest mistakes?

Filip Kaliszan:

Well, I think the big mistake was you extrapolate the assumption that the team knows you. So when you have 20 people, they all know you like Filip is a good person, whatever is my background, you have enough context about me that you sort of have some inherent trust.

Turner Novak:

If he says something, I know what he means by it, versus...

Filip Kaliszan:

Yeah, that.

Turner Novak:

It might be taken the wrong way if you don't know him that well, kind of thing.

Filip Kaliszan:

Right, exactly. That's a great example. Or how do I think about making decisions or what is the mission of the company or what matters to the company and, I don't know, is privacy important, is it not important? Things like that, right? So, all of these are, I think in the early days everybody gets it and everybody knows.

And then once you pass something like 150, 200 employees, I think it takes a concerted effort to make sure that the next person who joins the company understands what the founding team or the founders, or me, in my role, what do we stand for. And so, I think the mistake at the time was I just didn't invest enough time in activities that would help the broader team understand who we are, what do we do, how we do, what's okay, what's not okay, so on and so forth.

And it's not hard to solve. It was a matter of really paying attention to quality of all hands meetings, doing them on a regular basis, doing Q&A's with the team. I do a lot of skip level lunches. I do this to this day. I'll get together with a group of four or five, six employees that I otherwise might not interact with very often, but you hang out for an hour or two and now they sort of understand my mindset.

And if someone else asked them the question about, "Oh, why did Verkada decide X, Y, Z?" They might at least have some context of like, "Oh, Filip said this is how they think about it." And so, that propagates messaging and unifies the mission of the company with the broader team. So it's not just like, hey, come up with a mission statement, put it on a slide. I mean, we have that and everyone understands it, but it's how do you put it into action with people is really important.

Turner Novak:

Yeah, so that sounds like big initial kind of 20 to 200, anything from 200 to 2000?

Filip Kaliszan:

Well, there, I think it becomes a big challenge of how do you actually bring and train and successfully onboard that vast amount of people over what feels like a pretty narrow window of time, right?

Turner Novak:

Yeah, because assuming you're probably hiring at least one person a day or close to that, or more, maybe?

Filip Kaliszan:

More, right? So, one of the things I do to actually be connected with the team, I onboard all new employees.

Turner Novak:

What does that mean?

Filip Kaliszan:

Every two weeks to every four weeks, we'll have a new onboarding class. All of our global employees from any of our offices, I think we have 17 offices around the world, so everyone flies into HQ for onboarding. I do one of the onboarding sessions, a little presentation about the company, Q&A, sort of meet and greet the new you starting class.

And look, I mean now we have starting classes that might be 50, 60, 100 people in one go, so that's a big group of people. And our job, which I think, again, this is later on as the company got bigger, we had to invest in these systems, our job is to make sure that these 100 people who joined, I don't know, last Monday, become successful at the maximum possible rate and in the shortest amount of time, and that is actually a big challenge in itself.

Hiring the number of people is pretty tricky. And I think when you're going 20 to 200, I think pretty much it doesn't matter where you are in the world, most normal labor markets are big enough to support that. When we started going 300, 400, 500, so on, we found it hard to find the sheer number of people in one location that we could hire. And in the Bay Area especially the labor market is extremely competitive. And so, that actually led to one of our next decisions, which was to open offices outside of the Bay Area.

And I think today you might look at that and you might say, "Oh, that made total sense because you put salespeople closer to your customers." And yes, that is true, but the other factor, which was really important to us and was definitely a growth hack for us, was we could tap into new labor markets. We could divide the problem of hiring 100 people a month into like, "Well, HQ will hire 15, and Salt Lake City will hire 15, and Texas will hire 10," whatever the numbers are.

And so, all of a sudden these problems that it felt like a, "Oh my gosh, how are we going to get 100 people here next month?" Now you break the problem down and you divide and conquer, and each office has their own unique culture and elements and they can attract the local talent there, and that's become hugely advantageous to us.

Turner Novak:

And you kind of have a little bit of a decentralized org structure in the sense of an individual office might have a recruiter, or maybe I'm not quite saying that right, but how do you do that?

Filip Kaliszan:

Yeah, so look, decentralization is definitely a theme for us. I joke that Stalin and Soviet Russia proved that central planning doesn't work, so we believe in decentralizing. And what that means, I'll give you some concrete examples, for example, for recruiting, many companies will have one central recruiting function for everyone in the building, and that's fine, there's efficiencies that can come from that.

In our case, we decided each function has their own recruiting function, so my sales leader has a completely disparate recruiting team from my engineering leader. And what that leads to, which is pretty cool as an outcome, is you just get completely different practices. You realize that in the Bay Area, maybe for salespeople you're going to host happy hours in the marina, and that's kind of an effective recruiting tactic. For engineers, it might be something completely different.

Turner Novak:

Like a hackathon or something?

Filip Kaliszan:

Like a hackathon or some visit to the office or tech talk or whatever. And so, what's really cool is by decentralizing two things have happened. One, the teams evolve to their own needs and they're specialized in their own jobs, which is cool. They have more autonomy, they don't have to worry about each other's responsibilities. And from my perspective sort of leading the company, the reason I like it is now people can't point fingers at one another.

My CTO can't say, "Oh, we missed hiring because the CRO needed the recruiters to hire all the salespeople." No, hiring is equally important for engineering as it is for sales, and by splitting those functions everyone can chase their own independent goals and nothing gets in their way, which I think, again, for folks who are motivated and ambitious it's actually fantastic for the people doing the job because it's focused, it's undistracted, the metric is clear, the goal is clear, they know what to do, they get it done, and then they feel great.

Turner Novak:

So how did you decide when to do that? Because I could take what you just said and think, "Okay," I might be a 20-person company, I might have a sales guy, a marketing guy, a PR team, an engineer. I might say, "Okay, I need to hire five recruiters or I need to hire..." How did you decide when you need to start decentralizing the team?

Filip Kaliszan:

Well, that particular decision I think was very early. So, I think it was actually around probably 30 people, maybe 50 people. I mean, look, when you're 30 or 50 people, the core team is doing a lot of the work, so I was doing a lot. I mean, I still do recruiting, right? My CTO was doing recruiting, my initial sales reps were doing recruiting.

But at some point, kind of in the tens of employees, we realized that the engines for growth for our company are going to be one, our capability to build amazing software, and so we must have a ability to attract great people and retain them and train them and make them good at what they do, and so that was sort of the mission of the CTO.

And then two, our sales or our revenue scales linearly with the number of salespeople we have. So okay, great, we're going to grow an army from two to 10 to 30 to 50 to, I think now we have on the order of 700 quota carrying reps around the world. So to build that army over the course of a couple of years, you're like, "Wait a minute, if one recruiter can source, I don't know, call it three to five salespeople on average per quarter." You start adding the numbers up and you're like, "Wait a minute. I need an army of recruiters to be able to build my army of salespeople." And by the way, that's very different than the challenge of hiring the best engineers in certain domains.

Turner Novak:

Are there any tactics that you found work best for recruiting more efficiently or better or mistakes that you've come across that you made?

Filip Kaliszan:

I'm sure we have. I mean, I'll give you a couple interesting ones. I think within marketing at one point we did a billboard campaign, which you can't attribute the dollars to any customers you got from that, but at some point we decided, "Ah, we're big enough. We have enough budget. Let's put some billboards about what we do." That had a very nice halo effect for employees and for recruiting.

I think we talked about the other one in the early days any sort of external validation that the company is good or doing something good is very valuable, so the recognizable name brand investors that we got at the Series B, Series C, so on, that was an inflection point in terms of recruiting, so those were some of the kind of good things, yeah.

Turner Novak:

So then another thing on scaling, you mentioned that a big challenge was you had people that had been in the company for a very long time that had seen a lot of growth, very high amount of contribution to the team, that actually you had to hire somebody over top of them.

Filip Kaliszan:

Yeah.

Turner Novak:

How should I approach that as somebody if I'm going into that situation?

Filip Kaliszan:

Well, I mean, I think it goes back to my prior statement that I think if you join a company that grows really fast, the growth of the company will most likely outpace the growth of any individual. And I include myself in that category. I'm like, "There might be a day where I might not be the right person to do my job. That's totally fine. I'm optimizing for the company in the long run."

So, I think, for us, we accomplished this by being aware of that as individuals, and certainly everyone on my team is aware of that, and being egoless about it, so I think that's a property that we look for in people we hire, and I think it matters.

And look, I had great examples from the beginning of the company, tiny, five of us, whatever, seven of us, early days, one of my co-founders, he was de facto CTO, and seven months into it we realized that he's great at doing coding and building and architecting solutions, and he doesn't really want to spend his days hiring.

It's like, "Well, the CTO's job, hiring is pretty important." And so, he's still here, he's a core architect of the system. He loves his job. We brought in someone who's the CTO who's particularly good at some of these other skills.

The other example, which I think is really cool, and someone who scaled with the company for a long time is one of my very early sales reps, probably sales rep number five or six in the company, scaled to run the whole organization. He was sales rep number five, cold calling, closing deals, to running, I think he got the team to maybe 500 quota carrying reps and doing hundreds of millions and more than a billion in lifetime bookings, so he scaled from that beginning all the way to that role.

And I think for probably a period of two years or maybe a year and a half, I was telling him every other one-on-one, "I just want to remind you, there will be a time where I think we're going to need to bring someone who's seen how this story plays out at a certain scale so we don't have to reinvent everything from the beginning."

And I think the cool thing is if you transparently communicate about it and sort of position it correctly, it leads to good outcomes. That person is still with the company. He runs an awesome big part of the sales team. We brought in a CRO, and it just works out. And I think you should expect to do that. It's almost like if you're not thinking about where you can upgrade or what new people to bring to the team, I think potentially you're leaving things on the table.

Turner Novak:

Yeah. Well, speaking about upgrading and speaking about evolving as a leader or as a contributor, I know you talked about it before when we were catching up, you said, "I was the introverted engineer. I had learn how to become the CEO of a multi-thousand person company." How did you do that?

Filip Kaliszan:

That's a good question. Look, I think there are certain things that I gravitate to that I like doing naturally that have been helpful for me.

Turner Novak:

Like fixing cameras. We had a little bit of an issue, Filip was literally in here fixing the cameras, making sure they still ran.

Filip Kaliszan:

Super fun. I mean, yeah, we had an overheat situation.

Turner Novak:

Yeah.

Filip Kaliszan:

Not our cameras.

Turner Novak:

Yeah, not Verkada cameras.

Filip Kaliszan:

Not Verkada cameras, but the cameras that are filming us. So look, I gravitate to product, I gravitate to engineering. I love doing that, that's never going to change. I will spend my evenings thinking about features and how to make stuff better.

How I do that changed dramatically. And so, at the beginning, I literally wrote code and our first iOS app. Today, I have to think about, we have a team of 350 or so software engineers, how do I effectively spend my time in the areas that matter? How do I infuse ideas that I have to the broader team? And how do you do it in a way that doesn't feel like I'm micromanaging, right? Because if you're a highly talented software engineer, the last thing you want is a seemingly like, "Oh, this is just the CEO telling me what to do." That's super annoying.

Turner Novak:

You might say, I'm fed up with this. I don't want to work here anymore. I'm going to do something else.

Filip Kaliszan:

Right. Right. Exactly. And so I don't want to be that person. And so I think the way I tackle that particular problem is I try to be fairly self-aware of, okay, how people might respond to direction I give them, I always try to remind people like, Hey, I have an idea or a set of ideas. You're free to ignore my ideas. If my idea is bad, fine. Go do it another way. Show me that my idea was bad. And I encourage that debate and conversation. And I think the people who work with me in that capacity, for the most part, I think it works pretty well. I naturally enjoyed the sort of the fundraising and the presenting to an audience and presenting to customers aspect of the business. So that came in handy. I think what I had to get better at is thinking about how to do that regularly.

So we talked about it a little bit earlier, but by default I would say I'm a fairly private person. Sure, with my friends in a small setting, I'll tell you all about what I did on the weekend, whatever. In a bigger group or with 2000 employees, that's not my first topic of conversation. I'll just default to, yep, we do work, what's the next objective? How do we accomplish the next objective? Did we do it? Did we do a good job or not? And it's impersonal. And so I had to learn to be more human in a sense. It is just share more about what I do and be comfortable with that. And I think fundamentally became quite a bit better at that. And that just creates more connectivity between people. It is not just Filip the CEO, who gave me this directive or whatever, it's Filip the human who has two kids and normal human problems. And we get along, oh, and together we're going to solve this business problem.

So that was one. The last one I'll share, which is interesting. I learned this about myself through actually a coaching process and a 360 process that I did for myself. There's a property of me, which is both useful and bad in a sense, which is I'm very level-headed through good and bad. And it's obvious how that's useful now that I'm sort of aware of that, which is like, well, if something bad happens or crisis or stress, I stay level-headed, how do we divide the problem? How do we solve it? And I think in my role, that's very helpful because it just allows me to navigate more steadily. And I think the team appreciates the steadiness. The negative of that is when things go well, I'm also very level-headed, right? So you might work for me and you might be doing a tremendous job. And I'm like, fantastic. So you keep your job because you're doing a tremendous job, which is another way of saying I don't walk around and hand out praise to everyone.

And even more than that, I'm an auditory person. So if I do, I will say it to you. But most people are visual people. They remember what's written much more than what's said in person. And so that's a very tactical, very nuanced example of something I changed along the journey, which is now I actively remind myself to tell people, Hey, good job on this project or that project. I usually put it in writing on Slack or email. And so it ranges from big shifts to these little tactics that you need to adjust along the journey. And I think it all comes from building self-awareness, talking to people and just knowing what you can do better and always trying to improve.

Turner Novak:

I think one thing that being in the office here I think is very noticeable. You are very in-person focused. Obviously, you have a distributed team, but you're very much of, "We like working in the office." The office is super fascinating. You built out a staircase that you put right through the center of the office. Can you just talk about that? Why'd you do that? It's kind of an interesting feature.

Filip Kaliszan:

Well, we got very lucky. We moved into a large HQ building here in San Mateo. It's about 180,000 square feet, and it was divided into three floors, and it was kind of cold shell condition when we took the building. And there was just not great connectivity between the floors. And by the way, by default, we were going to put engineers on one floor and salespeople on another, and marketing on another. And so now you're one team, but you're creating these silos. And so that's what we wanted to sort of solve for is how do you connect people who might not naturally work together day to day on all the problems, but you want them to know each other and be comfortable and approach each other when they need each other's help fundamentally.

And so one idea we had was, okay, let's knock out a giant staircase through the free floors and literally place it in the physical center of the city block, which is our building. And so that was one of those projects. That definitely created moments of connectivity and people running into each other.

Turner Novak:

Because everyone pretty much uses that central-

Filip Kaliszan:

Because everyone uses it all day every day. And it's kind of cool like that. But then again, it's like that was one idea out of many. And then the many little ideas were, for example, having a shared cafeteria for everyone on the first floor. So that funnels people at least once or twice a day down to kind of get food. Building a cafe that's not a lobby. Again, most people want a tea or a coffee, great place to run in. We built sitting area there. People will hang out and it's super fun. And then it's little tactics. The snacks on the different floors are different, so you'll probably move floors to get your favorite snacks or whatever else it may be. So again, it's like the execution on many little ideas that I think as a whole, they create this moment of when people come into our office, they're like, oh, it's very vibrant. Things are happening. People are here. It's buzzing. And that's the objective. That's what we wanted to achieve ultimately.

Turner Novak:

Yeah, you're very focused on in-person. When COVID hit, I feel like you were one of the first to really say we are still very focused on in-person work. Can you just explain that story, how that happened and why it's so important?

Filip Kaliszan:

Yeah. I mean, I think we were definitely contrarian in a sense to the rest of what was going on. I mean, in March of 2020, like everyone else, we sent everyone home. No one knew what was going on.

Turner Novak:

You felt like if you looked at someone that had COVID, you might get it and you did not possibly-

Filip Kaliszan:

That was what we thought. That's literally how people thought about it. It's like, oh my gosh, you have COVID. I'm going to get it and it's going to be really bad. So we knew nothing, just like everybody else knew nothing. But I think very quickly, and when I say very quickly, literally over the next couple of months, we realized that it's very hard to grow the team. And by the way, at the time, we were doubling the team every 10, 12 months. It's very hard to accomplish that whilst being remote. And of course, we tried all the tools and all the practices that everyone else has done, but it wasn't quite the same. It wasn't working as well for us. Generally speaking, when it comes to big decisions, we try to be pretty first principled. Just think about from the ground up, does what everyone else is doing, does it make sense or not? And if not, how would we do it?

I deeply remember in 2020 there was this moment of everyone's going to go remote and in-office work is ending. And that's kind of the way of the world. And I think our view was sort of like, well, for thousands of years people gathered to accomplish goals, and I don't know that that's going to change because of this virus epidemic that happened. Oh, and by the way, it's not the first time that the world has seen an epidemic, right? Over the past couple of centuries, and even the past few decades, there's been lots, right?

Turner Novak:

Yeah. We get them every once in a while.

Filip Kaliszan:

Yeah, you get them. In Asia, we had SARS and you had all these different things that pop around the world. I think fundamentally, we didn't believe that that event would now just make the world fully remote forever, or at least we didn't believe that that was the right outcome for us. And so working backwards from that decision, we invested and we're lucky. We actually just got into the big building, so we had a ton of square feet relative to the number of humans.

So we could space them out, we could put plexiglass. We partnered with a local PCR clinic, which was testing us and the NBA teams. We were literally some of the early customers. So you'd come to the office and you'd get a same-day PCR swab. And we did this for months and I think more than a year actually, where employees would just get tested every day. And so we had full data on, okay, when you got COVID, please go home, all this kind of protocols. But the result, which was really cool, was we ended up building a truly in-office culture. So by 2022 or '23, other founders at some get-together would be asking me like, "Oh, how do we bring people back?" "Filip, what do you do when the first person gets COVID?" And I'm like, "What do you mean?" "People get COVID all the time." "Millions of people got it." Yes, when they get it or you know they have it, you send them home, they recover, or if they need more help, you offer additional help, whatever it needs.

But life goes on. The business doesn't shut down today, 2025 because someone got sick. So it was just interesting. It allowed us to stay in office. It allowed us to build a kind of stronger culture. At the time, it was tricky. I think now it is a huge advantage to our business.

Turner Novak:

One other really interesting feature you showed me in the office was you guys built a bar on the top floor. I don't know if I've ever seen that before. It's pretty cool. Can you just kind explain how that came to be?

Filip Kaliszan:

Yeah. I mean, look, I think we're not the first. So there's a lot of companies that build cool stuff in the office, and we dramatically believe in that. And it goes with what we were just talking about, which is the in-office culture. I believe my employees should get along and hang out with each other. It's yet another social circle. You have your family, you have your friends, and you have your coworkers. And so we think of, broadly speaking, our offices, not just HQ, but every office is around the world as what are the fun elements, how do we make these offices personal, and what moments can we create for people to hang out, get together, work together?

So to answer specifically, the lounge we have on our top floor of the building, when we moved into our San Mateo building, the square footage of the building has this awkward space on the fourth floor, which felt like it'd be quite isolating if we put a team up there. So we're brainstorming, what can we put there? How do we use this space? Maybe it's an event space, something else. And so ultimately we have this idea. I was like, ah, maybe we should put a lounge bar, hangout area with an outdoor patio. There's a nice balcony. So we got pretty excited about the idea initially. And it was interesting. We spec'd it out. And by the way, we're still sort of a growing startup, so we don't have infinite budget to build cool things. And I remember the commercial builder came back to us and they were like, "Oh, to build this level of thing, it is going to be very expensive." And I forget exactly the quote, but as a result, we put the project on hold. We're like, yeah, no way. There's other more important things to build out.

What was really cool, and I'm sharing this because I think again, it shows you how we think about some of these decisions. We had this idea, and it was like brewing in our heads we're like, ah, maybe this will be really cool. And then my workplace team, which again, we encourage, how would you solve this problem? Ultimately, they sort of got back to the first principles. Like, well, how much should it cost to build a cool hangout space with some umbrellas on the patio and nice furniture and a counter with some stone on it essentially?

Turner Novak:

Yeah, you kind of have this private dinner area too.

Filip Kaliszan:

Yeah, a little private dinner table that we have on the side. So we sort of approached it from first principles, and we realized that the commercial builder quote for this space was crazy, astronomically high. I understand why, but crazy high.

Turner Novak:

Yeah, they got to make money.

Filip Kaliszan:

They got to make money. There's margins, whatever. And it's also sort of ... because it's maybe not their bread and butter. It's not yet another conference room.

Turner Novak:

It's a custom build.

Filip Kaliszan:

It's custom. There's a lot of custom elements. And so they priced it out the way that maybe a custom area of a luxury home would be priced out. And that wasn't compatible with us. So it was really cool. My workplace team, which is under our CFO, we've hired people on staff, literally carpenters, drywallers, painters, and we built this whole thing ourselves with our own team that A, proved far more cost-effective, which actually resulted in the space being built. And then it became yet another one of those advantages we now have. With that team on staff, our offices, we can do more cool stuff in our offices and personalize them in a kind of cost envelope that's compatible with a growing startup. And certainly, those elements are massively appreciated by our employee base, but also very useful for things like events and customers and get-togethers. And it is just a pleasant space for people to gather and talk about products or talk about their needs as a customer or whatever it may be.

Turner Novak:

Yeah, it's an interesting lesson in I guess, outsourcing versus insourcing.

Filip Kaliszan:

Yeah.

Turner Novak:

What other cases have you done? Have you gone through where you're like, we should probably insource this, we should hire the team, spend a bunch of time versus outsourcing?

Filip Kaliszan:

Yeah. So look, I think we generally try to be very thoughtful about how we spend money as a company. And I always say, "Spend it like it's your own." I think as companies get bigger, it sort of becomes this arbitrary pot of money that, whatever, it came from VCs or it came from your customers or whatever. But I think as you get bigger, people get less responsible of spending money. And so I think our mindset is very much "spend it like it's your own." Would it make sense to do this? This was your own money in your own home or you wanted to do something. And that leads to some very interesting outcomes.

So another interesting one in addition to sort of the office one is how we think about tools and stuff we buy to enable our team. So every other software company, we buy a lot of software to build our software, to run our operations, to run the teams. One thing we did there, which was pretty cool as an initiative, it worked really well, was we said, well, we sort of don't actually know how much software we consume and how many subscriptions we have. And I think the best parallel on a personal level is like, well, you wanted to watch some show and you signed up for Netflix and then Paramount and then Disney+ and who knows what else. And two years later you're like, oh, I spent 400 bucks a month on video streaming subscriptions and I watched one show a month, right?

Turner Novak:

Yeah, that's crazy.

Filip Kaliszan:

Maybe that's extreme, but the parallel of that for a company is at some point in time, it made sense to buy this tool and that tool and so on and so forth. And it just accumulates. And unless you spend effort to go the other direction and tell yourself, Hey, I'm going to clean up my streaming subscriptions, it's not going to happen, right? So something cool we did, and this was another CFO initiative, was we call this Software Zero. So we said Software Zero, what can we eliminate what's not being used? And we just said to the team, if you get together with another employee, if you find things that we have that are not being used, we'll pay you a thousand bucks, which sort of like a token amount.

But I think people-

Turner Novak:

That's a lot. That's a lot for an individual.

Filip Kaliszan:

That's a lot. I mean, it's cool, there's a project you can do, but relative to this amount you're spending on the software, probably not that much, or at least that's kind of how we're thinking about it. But it gives the incentive. And I think for any employee, it's also really cool because it's like a credible, meaningful thing I did that improved the efficiency of the whole business. And so we rolled this out, I want to say maybe six, eight months ago, something like that, and we didn't know if anyone would care or if they would do it or they wouldn't do it. It turned out we paid out, I think on the order of $25,000 in these bonuses. So, awesome. 25 people did something to remove software. The total savings in the software that we didn't use, that we now don't pay for, $1,134,000.

Turner Novak:

Oh, wow.

Filip Kaliszan:

So just awesome. It is just good hygiene. And so I think things like that. They're good examples of things that I think, again, if you don't put an effort or if you don't think about, you revert to some mean, which is probably not the greatest position to be in. And so it always takes these efforts that, okay, how can I course-correct? What can I do with the company that puts it back into the mode that I want to be in, which is efficient, fun, fast-moving, building the best product, supporting customers in the best way.

Turner Novak:

Yeah, that's an insane ROI. That's like 40X ROI.

Filip Kaliszan:

It's amazing. Yeah, you do it any day, all day.

Turner Novak:

Yeah. Interesting. One thing, maybe one last topic to end on just talking about long-term business building a sustainable business. How do you think about it over the next couple of years? Are you one of those companies going to stay private forever? Have you thought about going public? How do you generally think about that?

Filip Kaliszan:

Look, I think in the long term, I think being a public company is something that is on Verkada's journey. The way I about that very decision is what's the most effective way to building a good business that's efficient, that's generating returns for shareholders, for employees, so on and so forth. I think the reasons and the way we would think about it is we're efficient enough that raising capital privately today is fairly easy for us. If I needed additional hundreds of millions of dollars to invest in the business, we could do that privately, we could do that publicly. I think some of the reason that the company will ultimately go public at some point will be the returns for the early employees, the investors, so on the liquidity that comes with that. In the interim, we've also done things like tender offers for some of our employee base, which are, it's sort of a great tool for the interim sort of between the two states of the business.

Turner Novak:

WordPress, I don't know if you've ever used WordPress before. It's like 43% market share of all websites on the Internet.

Filip Kaliszan:

It's amazing.

Turner Novak:

Insane stat. But they have an interesting program where they have this quarterly and bi-annually liquidity program for employees. I don't know if you've heard about this, it's similar to what SpaceX does-

Filip Kaliszan:

Yeah, right.

Turner Novak:

Where it's like you can buy shares as an employee, you can sell shares. They just off the balance sheet, the company will kind of buy back from whoever's out there. Interesting.

Filip Kaliszan:

And I remember Palantir did it back in the day. I think there's various ways of providing liquidity. It just ultimately depends on where the path takes the company. And I think the other thing that I frequently tell my team is, look, we certainly have the scale we're going public is feasible. If we wanted to go public in the next couple of months, next year, we could do that. The big question becomes how do you do that successfully and how do you maximize the growth opportunity for the company over the horizon over the next five years, seven years, decade? And I think what I think about a lot, which I think is an easy exercise to do, is if you think about startups and then companies who become legendary, companies who last for decades, a lot of the value of those companies is the result of compounding for a very long time.

So if you, I don't know, looked at Googles or Amazons or pick your favorite tech startup's stock chart, and you sort of zoom it out to the max and you look at that chart, it's going to look very flat for the first many years and then the compounding happens later. Now, if you zoomed in those early years, you'd be like, oh my God, this thing was growing like crazy. But I think my point in that and in sharing that often with my employee base is like, look, what do you really care about or what you should care about is how do you position this company in such a way that it is set up to do that compounding for many, many years to come because ultimately, I mean, that is a fantastic way of generating return for the shareholders and everyone involved.

Turner Novak:

But yeah, I think that's a good way to end it with customer obsession kind of sounds like the general Verkada ethos. If you want to find more about Verkada, about you, what's the best way to fall along or learn more?

Filip Kaliszan:

So verkada.com, obviously, for anything product-wise, any customer intros, we love to do it. And we will do everything from giant commercial spaces all the way to ... We do some high-end homes. We're not a consumer solution, but we will do the sort of mega homes-

Turner Novak:

You can do enterprise homes.

Filip Kaliszan:

Yeah, enterprise homes. If you have an enterprise home, talk to us. Our stuff is really cool. Or if you really like gadgets and stuff, as an engineer, we'll send stuff out pretty freely and-

Turner Novak:

Oh, cool.

Filip Kaliszan:

You can play with it.

Turner Novak:

Can I order that on the website or would I probably have to email someone?

Filip Kaliszan:

You'd probably fill out a form on our website and we'll be in touch with you very, very quickly. But yeah, I mean, it's very simple to set up. The products are really cool. And then we have a lot of material on our side, but also on YouTube, on the web about just how Verkada stuff works and how it works for our customers. Yeah, it would be ... If it sounds interesting, like join us on this journey. I think one thing we didn't talk about is I very much believe that we're at the beginning of this journey. I have to remind the team of that all the time. Verkada's 2,400 employees, close to a billion in annual sales, but if you think about the sheer number of buildings in the world, we're just scratching the surface, right?

Turner Novak:

Do you have an estimate on market share, just percentage of buildings globally?

Filip Kaliszan:

Yeah. I think in video, which is where we started, we're in the top three video sellers in the United States, video security. So we're fairly getting there. If you look at the market penetration, it sort of depends by segments. If you zoom all the way out and you're like, how many commercial and government buildings are there? In the United States, we're sort of at low single-digit percentage penetration of those buildings. So still very early. Oh, and then if you extrapolate and you look at the rest of the world, it's much earlier than that. Even though I think revenue-wise, the company is becoming meaningful, there's just so much of this type of infrastructure in the world that I think we're at the beginning of that journey. And again, I think some of the things we're seeing the sort of progress in AI and just general rate of software deployment to these locations, it's going to be a fantastic next 10 years in terms of the growth of the business.

Turner Novak:

I feel like that's an interesting place to end it. Thank you so much for taking the time to do this. This is a lot of fun.

Filip Kaliszan:

Thank you. I appreciate it.

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