You're listening to Bloomberg Business Week with Carol Messer and Bloomberg Quick Takes Tim Stinovic on Bloomberg Radio. Actor shares they rallied over eight percent today, taking part in the overall jump that we saw in the equity markets today. Stock though still under pressure, roughly lower by maybe eighty
percent lit a bit less than that. The seven point eight billion dollar market cap company is an identity and access management software firm working in the Club and Googgenheim upgrade the stock just on Monday, saying the company's valuation is quote too compelling to ignore despite challenges that will take several quarters to sort out. So we want to talk about the business and what is the way forward. Todd McKinnon is the chairman, CEO, and co founder of Octa.
He joins us via Zoom in San Francisco from the company's Octane twenty two event. Todd, nice to have you here on Bloomberg. How are you. I'm good, Carol, thanks for having me on. It's great to be here on Bloomberg Radio and TV. Well, it's great to have you here. Lots of talk about I gotta ask you though, I want to get into the business and about the event and some of the news that you guys, you are
though in the heart of Silicon Valley. Have to ask you, is everybody talking about the recent cryptomolies that we saw with SPF and f t X. I think we're all watching it and we're all trying to figure out what it means for the broader ecosystem. But one thing is for sure, Silicon Valley is in a different world than
it was a year ago. Everyone is making sure that we're doubling down on our most strategic and important initiatives and maybe some of the things we were doing last year that maybe it wasn't necessary, We're we're not focusing on that as much as we are all of our core strengths. And that's why work so excited about this conference and what we can bring to the whole technology
market with our world class identity products. So, Todd, I'm just looking at the f A functional on the Bloomberg terminal and I it looks like Wall Street analysts have you know, thirty growth revenue for the next few years.
Top line for you guys, what's driving that growth? Well, every industry across the world is trying to do more technology, whether that's adopt the innovation in the cloud, or keep secure and stop the risk of data reaches, or transformed digitally and build better customer experiences through the world world beating websites and mobile apps and identity is at the heart of that. You need to log on employees at work and do it securely and make sure there's no
fishing or any data breaches. And you need to make sure you give your customers. You're building that great new app at your company. You're getting your subscribers or your customers or your citizens online to connect to you directly. And you have to have a great app, and that starts with a great logging experience. And we have our help our customers and organizations around the world do just that. You know, I seek some of that top line growth, and then I see your stock is down seventies some
percent year to date. Is this just a tech washout or what's the street concerned about with with your name? I think there's a couple of things there. There's definitely valuations across the border technology you're down. And also we took a pretty big, bold step a couple of years ago to branch out into this important new market. For US, it's called the customer identity management market, which is we
serve with our customer identity cloud and that acquisition. Over the past couple of quarters, there have been some some execution stumbles in terms of integrating that, and we're working through those now and really excited to talk about our long term products. You're talking about that six and a half billion dollar deal, right AUTHO and zero excuse me, so tell me about like how what kind of you know through put if you will, that you're seeing already
on that acquisition. I know it's early, but tell us about that. Well. It's, like I said, it's a really important strategic part of the market for US because traditionally, identity management has been sold as part of a monolithic platform. You got it when you bought Microsoft applications or you got it when you bought applications from IBM. But there's and that's the workforce identity market, which is employee logging
in and employees being secure. But on the customer identity side, there's this huge untapped potential where engineers and developers and product people they're building identity themselves. They're spending their valuable time creating log in pages and password reset functionality and multi factor authentication. But there's a better way. Every hour they spend on identity as an hour they're not spending
on innovation. So we have this product, Customer Identity Cloud, which is the technology from the off zero acquisition that can do it for them and free them up to spend every hour and every calory they expend on great innovation and their products and not on identity. Which were the experts and we're talking about Tom McKinnon, co founder and CEO at Octa via Zoom from San Francisco. Just want to mention a headlined Charlie Pellett talked about a
little bit earlier. This is coming from information a couple of sources, Musk Elon Musk saying the Twitter bank that a Twitter bankruptcy is not out of question. So again this is crossing the Bloomberg terminal here on this late
Thursday afternoon. So todd Um in terms of let's take a step back, if if we, if we may the macro environment right now on the outlook for your business, UM, it feels like a lot of enthusiasm, barring the crypto side, UM, certainly the equity side of things, because of that softer inflation print. How do you see the economy and the outlook for your business, let's say over the next six
to twelve months. Well, we've started oct fourteen years ago, and over the past fourteen years, we've seen unprecedented growth across cloud computing. Now cloud computing is the you fault computing platform for every organization in the world. We've seen security risks and the how you could avoid risks with great cyber posture. We've seen that become as important as ever, and we've seen every organization want to connect with their
customers online. And the macro, the macro economic environment is changing money. A year ago, zero interest rates, investments weren't weren't as focused and as scrutinized as they are now. And so no company, no organization, no industry is immune to that. But what's really giving us a very bright outlook for the over the long term is these trends continue. Everyone is figuring out how they can adopt the latest technology for their workforce. They want to do it in
a secure way. They want to build world beating customer apps because in the time of economic uncertainty, it's many times it's the best time to double down on innovation so you can leap ahead of your competitors. We know this in two thousand nine when I started Octa, we took that time. There was an economic problem, but that the Great Recession, and we started Octa in this downturn, and it was a good time to focus on innovation, and we we built the industry leading company because of that.
So Todd, how would you characterize the risk appetite in Silicon Valley these days? If I had a really cool idea and I go to Sandhill Road looking for some venture capital, how would it be now versus a year ago? I think it's I think for the top end of the VC market, the premier funds, the the most entrepreneurs going out there with the strongest backgrounds and the strongest track record. It's as strong as ever. The overall amount of funding is way down, and you see that happening
happen in these cycles. But great entrepreneurs have great ideas. They might have to work a little harder to raise that round, and the valuation certainly isn't going to be as high, but the best ideas and the best entrepreneurs they're gonna be funding. I think that's will always be true because there's so much potential in technology. At OCTA,
we are technology enthusiasts. We believe that over the next five years you're gonna see amazing innovation and collaboration technology and the ways to more more work more effectively, and collaborate with teammates remotely. Especially on the security side as well. We think there's going to be security breakthroughs that make companies ten times more productive, Which is why one of our core beliefs is that we believe in this world
an open ecosystem of innovation. We don't believe. We don't believe that a monolithic platform should lock you in and and choose and make you choose subpar applications and services at the you know, just because they think it's more integrated or more secured. We think this open ecosystem, where the best innovation can be used by any company, that's the right way forward, and that's what we're trying to build. Hey, Todd, I think people are listening and they're like, Okay, wait,
what are you talking about? So how does it affect you know, people in their workspaces and everyday lying living break it down for us? Well, I think I think we've been through the last three years with so many people working remotely, and we we've been as an industry and as a as a collective workforce. We we've done
a good job collaborating and communicating. But I think the tools that we use, whether it's chat or email or video conferencing, that they they weren't designed for this world where remote is almost the default, and working in a hybrid way in the office and remotely is the way every organization, every company operates. So I think when we get together in five years and we talk, we're gonna
be amazed at some of the new technologies. Maybe it's virtual reality headsets, or maybe it's a new kind of collaboration software that can mix a hybrid meeting where some people are remote and some people in the From the metaverse, and I'm not making you a joke, like I feel like it creeps into every conversation. Is this where the metaverse maybe has a real world application. I think what I think about the metaverse is really an evolution of
the Internet. So today we use the Internet on phones and computers, but we're going to access the Internet on these VR headsets and these augmented reality devices. It's I think that's inevitable. I think thinking it's a totally discrete thing that's independent of the Internet, or a whole new version of the Internet, is probably the wrong way to
think about it. I think it's it's a new way to interact with people, and more people over time we'll use these new devices, but it's the same Internet, the same way to work, the same way to collaborate, the same way to socialize, as we've seen in the past. Todd, you're in San Francisco. San Francisco, like a lot of tech companies, give us your overview how things are in San Francisco these days. A lot of people are saying it's best days are behind it. Um, they've got some
issues here. How do you think about it? I love San Francisco. We started locked in San Francisco. We've been here headquarters for nearly fourteen years. I've lived in San Francisco's I've lived in San Francisco since the late nineties. It's a great city, and I think every great city has challenges and opportunities in San Francisco's trying to work through things. But San Francisco and the Bear has given
a lot to me. And a lot to Octa, So we're focused on giving back and helping it prosper through these times, which you know, for a lot of a lot of cities these days, is a little used to be, all right. Mr Elon Musk his first email to his remaining employees was, you got to come in every day. What's the work policy at Octa? We're I think we're hybrid, so we we give employees the choice to work where
they think it's most effective for them to work. One thing we are learning, and the entire company is learning, that there are many things that are done better in person, whether it's collaborating on that next great innovation or that next great strategy that has to have a lot of back and forth, and you have to be able to read the body language and build relationships. And that's another
thing we're learning. As you hire a lot of people and as people change roles and work on new initiatives, building that trust and that bonding early in the in the team work process is really vital, especially when you get down the road and you have to deal with conflict and deal with controversy. Having that bond that can be built from in person working relationship is super valuable. So I think the industry we're learning and we're getting
better at it. Well, last question on that vein um really quick twenty seconds in terms of the job jobs that are out there, are you hiring, are you going to keep your workforce as it is or might you have to let some people go depending on the outlook were we we are growing and we are investing. We definitely are making sure our investments are doubled down on the highest priority things we have to do. And I
think this is an industry wide thing. I think many companies that are doing these layoffs, it's it's more about focusing their investments on what they think are their most strategic differentiators versus I think in the past few years, I think we got a little we spread ourselves industry wide too widely, and we weren't focused enough on the core things that are going to move our companies forward.
And that's I think what folks are doing. So appreciate checking in with you, and I know it's been a busy week. Todd McKinnon, thank you. He is the chairman, CEO, and co founder of Octa, joining s VA Zoom in San Francisco from the company's Octaan twenty two events