0 - 23 billion in 4 years: The product angle

Last week Google made the news for their offer to purchase a cyber security company. This might not be of interest to many.

But to those who are interested in how to start a business and within 4 years of starting, receive an acquisition offer of TWENTY THREE BILLION - read on!

As a company that has nearly 1000 employees and earned over US$350 million in 2023, there are many angles from which Wiz can be analysed.

But what I’m most interested in due to my background is their product, and what made it important enough to the market to earn Wiz $2m in revenue within 6 months of their existence.

I’m a believer in there being no such thing as a overnight success - there’s a back story to be told.

Assaf Rappaport, the Wiz CEO and his three Co-founders, all specialised in cyber intelligence within the military. They then all co-founded Adallom, which was sold to Microsoft within 3 years for $320m, and then they all worked within Microsoft to setup a new business within Microsoft. This last part is very significant, which I’ll explain later in this blog.

Once the Wiz founders decided to leave their relative corporate comfort at Microsoft to rejoin the startup world, the Adallom crew decided that they wanted to build something bigger than they had previously, but they were unsure what that would actually be.

They played with various ideas, from online payments to next-gen network security. Talking to dozens of prospective buyers, mostly chief information security officers, to find out what they needed, they gravitated back to cloud security.

So what was the problem that these CISO’s were facing?

Companies moving their operations to the cloud were endlessly annoyed at how much time existing tools required to deploy and how complicated they were to run. A vulnerability in just one open-source code snippet, reused in dozens of places, could mean an endless game of "catch the pigeon". In the cloud, any connection, even a seemingly inconsequential one, could provide an opening for a devastating hack.

The solution

Wiz’s solution: a tool that could run without a lengthy download process (what’s known as “agentless” software), with a handy interface any developer could understand. Within minutes of a customer turning over its AWS or Azure credentials, Wiz could check every connection and pathway connecting them to the outside world. A dashboard called the “risk graph” would prioritize the most critical issues, helping developers know where to spend time.

Igor Tsyganskiy, former CTO of Bridgewater, and who signed what was then Wiz’s largest multiyear contract in autumn 2021: “A bunch of people had the tools, but to deliver ROI almost instantaneously, no one else was there.” He says the investment paid for itself in just one week when it helped Bridgewater identify multiple exposures to a zero-day vulnerability called Log4j, a “potential digital Covid” that threatened to expose its $100 billion–plus in assets to cybercriminals.

So they had the right product, for a market that had a great need for their solution and the right team. But that alone is not enough to explain their supernova growth.

Timing

COVID led to “two years’ worth of digital transformation in two months.” Companies couldn’t wait a year to implement cloud security - they needed it now and Wiz was there to deliver. Additionally, during this macroeconomic climate, many customers want to rationalise spend and are tired of products that provides a solution to a single problem rather than addressing all the requirements that might otherwise be met with a multipurpose or multiservice product.

Ambition

Perhaps aided from their previous successes, the Wiz founding team were clear on their business approach - GO BIG OR GO HOME!

The world’s sometimes-richest man, Bernard Arnault (CEO of LVMH), was so impressed by Rappaport’s ambition that he wrote Wiz a personal check. Wiz own their reputation for aggresive growth. They’ve raised almost $2 billion to date, grown to c.1000 employees and aim for the top in regards to enterprise clients. In August 2022, Assaf stated that Wiz protected more than 25 percent of the Fortune 100.

And the significance of the team’s time at Microsoft?

Ami Luttwak, one of the co-founders said, “We came to Microsoft with the Adallom product,” “Part of the transition was to remove maybe 75% of the features, but to make it scalable.” They integrated Adallom into Microsoft and ultimately deployed the product to 100 million users.

“The transition to Microsoft taught us how to view startups in a different way,” “It wasn’t a feature fight. It was: ‘How do I build a scalable product that, from an engineering perspective and also from a usability perspective, anyone can use? And how do I do that without adding complexity in deployment and usage because you’re aiming for huge scale.”

With the feedback from CISO’s on what was needed, the team launched Wiz in January 2020 to rethink how cloud security teams could understand their infrastructure across multiple cloud vendors: “After talking with a lot of teams, we came to the realization that what’s broken is not a specific feature or functionality,” says Luttwak. “What is broken in cloud security is that the entire operating model of how you do security needs to change.”

The group had built what Luttwak calls “the scalable startup.” It’s a different model from how the team operated at Adallom: usually, in a startup, the founders are focused on whatever the customer wants. “But in a scalable startup, you think like Microsoft: this is going to be used for 10x, 100x the load we have today because we’re going to succeed. So let’s build in a scalable manner.”

This against the grain approach of running a startup, has affected the trajectory of Wiz to great effect!

For me, there are so many interesting takeaways from this Wiz Story. What lessons did you find most valuable?