Tuesday, February 12, 2019
Andrew Peterson of Signal Sciences On A New Funding, Growth, And Startup Scaling
Los Angeles-based Signal Sciences (www.signalsciences.com), which develops web application firewall software, just inked a big, $35M series C funding round a few weeks ago, and now has plans to dramatically expand its hiring in Los Angeles.. Andrew Peterson, the company’s CEO, says the company is looking to hire up another 80 people here in the LA area. We caught back up with Andrew to hear about the company, its expansion plans, and what he’s learned as a startup entrepreneur.
Tell us a little bit about this round?
Andrew Peterson: The lead on this $35M, Series C round was Lead Edge, which is a New York venture capital investor. As you know, we moved to Los Angeles from New York, and we also have a small office in New York and know the community of folks out there. Lead Edge’s claim to fame, which is very different about their group compared to other VCs, is that their investors are former operators from around the country and around the world. As part of the deal, not only do they invest in a company, but they help companies tap into their massive network. We also included existing investors we have locally in Southern California. We’re excited about both angles.
What does your offering look like nowadays?
Andrew Peterson: It’s always been about how you protect websites from being attacked in various ways. We have a piece of software which we sell into the business-to-business market, which we install on systems to protect consumers. The easiest example is for an online banking system. There are two different ways people typically try to attack those systems. For example, when someone makes an account takeover attempt, they’ll often try to use a series of fraudulent credentials to take over an individuals account. The other way, is an attacker tries to attack the core website itself and get access to the user data behind that. The poster child for that is the Equifax breach, where their entire database was exposed after a breach. We protect against both styles of attack.
What was it that you were telling investors that interested them in getting involved in this round?
Andrew Peterson: That’s a really great question. There were a number of different things. There are so many startups in the security industry who manage to get off the ground, but not a lot that are able to break out from that early stage and into the late stage. The thing that really specifically helped us with this funding round, was the customer traction we have been able to show. If we are able to get a customer to test out our technology in a live, proof of concept, we are able to win nine out of every ten POCs, against incumbent competitors, including companies like Akamai, Imperva, or F5. We are going up against those legacy players and winning on a regular basis, and the only thing stopping us from more wins is more exposure, getting more people exposed to our technology. That’s why we decided to partner up with a venture firm, to be able to grow the organization to get more people aware of what we’re doing.
What’s been the secret of being able to scale out your operations and win the business you have?
Andrew Peterson: Don’t let anyone tell you that building a business is easy. There’s lot of hard work from our full team going into our success. At this point, we’ve installed 10,000 applications, and are protecting some of the biggest companies in the world and their sensitive applications, including folks like Adobe and Under Armor. Three is no secret to success, it’s coming in and doing our job every day, and making sure we are really satisfying our customers. The other thing, which is really satisfying especially in the security industry, is word of mouth. That’s so important to get success and expand our customers. We won Gartner’s Customer Choice Award for a web application firewall, specifically because we had over 80 review which were five out of five, from a bunch of different customers and industries. Obviously, once word of mouth gets out, and also if you have great people on your team to get you more exposure, the easier it becomes to win business. It’s a lot of hard work to make that happen.
What were the proof points that helped you ink this Series C?
Andrew Peterson: The biggest thing I heard from investors, was that although they want to see top line revenue growth, which is always exciting for them, is they want to see that done efficiently. Instead of just raising a bunch of venture capital, which is easier to access than before, and just spending a ton of money to be able to show that top line growth, is they also want to see that you’re growing efficiently, and in a way that’s sustainable for long term growth. At this stage, we have started to look internally to see if we have repeatable processes that we can scale out. If you talk to any growth investor looking for later stage companies, they’re very excited to see that we have very health metrics when it comes to sustainable growth patterns.
Any lessons you’ve learned so far in the startup process that you wish you’d known before?
Andrew Peterson: You’re always learning. One of the lessons I have learned over many years, which is not new, but which continues to be reiterated tome, is you have to hire people who are smarter than yourself. Surround yourself with the smartest people you possibly can. You always want to hire yourself out of a job as you scale out over time. We have had the fortunate position of multiple years of hiring great people. Specifically, we have great leadership on our team, which is far better at doing the job than I could ever have myself. They have helped to continue to scale the organization.
Finally, what’s next milestone for you now that you have the Series C under your belt?
Andrew Peterson: There are a couple of different areas. One area is we really want to be able to get in front of more customers. We’re winning 9 out of every 10 proof-of-concept implementations. We’re really focused on funding go-to-market and scaling out our marketing efforts. On the other side, we’re getting back to our roots. We continually score 5 out of 5 on surveys for our technology stack, which people have said it fantastic, but we are far from satisfied with that. We will continue to innovate on the technology side, and really help change the industry, which is why we got into this business in the first place. Finally, we are planning to hire more people. We want to hire up to 80 more people in the LA area. We’re always looking for more talent in the area here, and we’re looking for people who are excited to be part of what we’re building here.
Thanks, and good luck!