Tom “TJ” Jermoluk, Beyond Identity: $205 Million Raised at $1B+ Valuation
Over the past 12 months, we've interviewed 30+ founders who have built companies with a valuation that exceeds one billion-dollars for our show, Category Visionaries.?
From these conversations, we're excited to launch Unicorn Builders, a new weekly newsletter that distills the top actionable lessons that B2B founders can learn from founders who’ve defied the odds and built billion-dollar+ technology companies.?(Subscribe on Substack here).
In our third edition, we dive into our interview with Tom “TJ” Jermoluk —?a true Silicon Valley OG who recently jumped back into the driver's seat to launch Beyond Identity alongside his long-time partner, Jim Clark, co-founder of Netscape and early investor in Apple, Facebook, Twitter and Palantir.
While preparing for the interview, we came across an awesome Youtube video from 1996 when the Nintendo 64 was officially unveiled. Tom was featured in the unveiling as the President and COO of Silicon Graphics who provided the chips to Nintendo.?Having the opportunity to interview someone who has been a major player in the tech ecosystem since the early days of Silicon Valley made for a fascinating conversation full of interesting insights and stories. Here are the top lessons learned from the conversation with Tom.?
#1: Align your product around regulatory shifts to create urgency.?
"The overall passwordless market is expected to be a $22 billion market next year. The US government now has put out an edict if you want to do business with them, you have to have a phishing resistant MFA solution. New York Department of Financial Services is saying if you do online business with anybody in New York, you have to have that form of solution. The FTC is now saying, and so there's a lot of tailwinds all pushing people towards phishing resistant, passwordless based MFA solutions, which happens to be, of course, what we created. So we see a tremendous market shift going on there. We think we're in in a great position with the right technology to be able to do that."
??Actionable takeaway: Leverage regulatory shifts to your advantage by aligning your product to meet new standards. This turns your solution into a necessity for potential customers, driving demand and growth.
#2: Articulate a clear and compelling category story.?
“We're definitely creating a new category. Identity management and security were two different siloed parts of organizations in the past. So companies that were identity companies, Okta, great example, built a great company off of being an identity company. Directory based Microsoft Azure ad directory system, Okta has that. But you think about how they developed it was all very much centric around the identity without a lot of thought given to the security of that. There was a different group working on different kind of technologies for that. So the notion of zero trust and moving, what you've probably heard is that identity is the new perimeter. Identity must, by its nature, become security focused. And that's really the new category that we're working in and defining, if you will, on that road to zero trust is how do you do zero trust authentication??
Because you have to start it with the identity and carry that along through every different point within the company of touch, wherever it touches, and trying to get to an asset, to a piece of data, to another account, to a different system on prem in the cloud, wherever it might be. So it's really creating that new category. There are a number of companies now that are all sort of moving towards that zero trust goal, but we feel like we have a pretty good head start in our architecture and getting there."
??Actionable takeaway: Having a clear category story is mission critical when you are creating a new category. You need to convince your market that you truly aren't like other products on the market and truly deserve your own standalone category. Having a clear category story streamlines strategy, enhances communication, and is key to establishing your position as a category king.
#3: Embrace your role as category evangelist.
“When you create a new category, the easiest example would be if I went to people before there were airplanes and they had to ship produce from California to New York. And I went out there and I said, well, what do you need? They'd say, Well, I need a faster car or a faster truck, or a truck that could hold more produce or whatever it might be, I need to get this there right away. But they don't say, oh, I need an airplane. Because they don't know what an airplane is, right? So then you have to be able to tell them, hey, what if I could create an airplane? I would put it in the sky and I would fly it there and I could get it there in 5 hours instead of in two days.?
So then they're like, well, what are you talking about? How could you do that? Right? So you have to go through that step of explaining to them why an airplane could fly and how you'd be able to do that and is it going to crash and can you keep it maintained? All these other credibility parts of the story come up.
So it means that when you create the company, you better put a team together that's comfortable being evangelist. You need a team of people that really understand and get off on that ability to evangelize, to be able to go into a situation with a customer or analyst or wherever it might be. And be prepared to explain yourself, to take those steps, to be able to create in people's mind a picture, to paint a picture of how you can do things a completely different way."
??Actionable takeaway: If you're pioneering a new category, embrace the role of its leading evangelist, not just for your company, but for the entire category. This involves educating potential customers and investors about its potential and value. It requires patience, excellent communication, and belief in your vision. Ensure your team is ready for this evangelistic role as it's key for driving adoption and establishing market leadership.
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#4: Master the art of storytelling.
“From the time that you first try and raise money, you got to be able to weave a great story for the venture community, to be able to captivate them and give them the vision of what you're doing in like, five minutes or less. I was on the venture side as well. I was a General Partner with Kleiner Perkins for a number of years, and I saw 1000 pitches in a year. And it really took a special someone and something to stand out from all that, because your eyes kind of gloss over from hearing it over to over.?
Founders better have or one of the people on their team ought to have that ability to spin the story the right way in a clear, concise way, and not hyping it, not spinning it from political standpoint, but be able to boil it down to its essence and get the point across."
??Actionable takeaway: Master the art of storytelling. This is essential for capturing attention from investors, customers, talent, journalists, and analysts. Embrace your role as Chief Storyteller and ensure your story is authentic, compelling, and ambitious enough that others can rally around it.
#5: Think long term when it comes to co-founder relationships.?
“Jim Clark, the founder of Silicon Graphics, and I have been together 38 years. I remember when I first went to an interview with Silicon Graphics, i'd just come out of Bell Laboratories. I went and talked to Jim and like 4 hours later we'd covered eight whiteboards with all kinds of architectural diagrams of how we saw the system evolving and where things were going to go.?
We really hit it off on that kind of a basis and it turned into a really deep personal friendship as well. We shared a love of flying. We both did some amateur motorcycle racing, car racing. Back then. We lived near each other and hung out a lot and would talk about the philosophies of life and technology over a glass of wine on his back porch. So it sort of evolved into this mutual respect over time with both technical capabilities and also with just our other personal interests as well. But the other key there is that we are complementary. He's a real entrepreneur, classic entrepreneur on the standpoint of aggressive, always pushing hard, impatient about things, short attention span of wanting to move on to the next thing and get it going and push that way.?
And I, of course, am the operational side of it. So I have to worry more about the P&L and hiring people and taking care of the details, the nuts and bolts of running it and setting up a company. He respects my abilities in doing that and doesn't really get in the way of that. And I respect him when he comes to me with his entrepreneur colored glasses, if you will, of something that I'm doing, if I'm not going the right way or not seeing an opportunity, or not pivoting something or not going after it fast enough. So it's a kind of complementary skill set and a deep respect for our technical capabilities.”?
??Actionable takeaway: Finding a co-founder with complementary skills is crucial for the longevity of your professional relationship. Consider not just the immediate business needs, but also your capacity to collaborate effectively over decades. Shared vision, understanding, and mutual respect are integral to this enduring partnership. Long-term thinking in selecting a co-founder ensures compatibility and facilitates the development of strategies for enduring success, thus guiding your venture's growth throughout its lifecycle.
#6: Move to Silicon Valley.?
“If I was starting in my career, I would head right back to Silicon Valley. Obviously, COVID has accelerated people's ability to work remotely. We have a tremendous number of engineers that are doing that and doing it quite well. But if you're just starting out, how do you learn that first? So most of our engineers that are working remotely are very experienced people. They know what they're doing and they know how to architect and code and bring ideas to fruition. I learned that in that crucible of being there in person and all those late nights and eating pizza and drinking Dr pepper and working all night long with your gang in the lab and trying to make a machine work or boot up or get an OS done or whatever it might be.?
That's how I learned what teams were all about, not just the basics of coding. I learned a lot of that at the laboratories, obviously, and in my university career. But learning how a team worked, how a functional entrepreneurial team worked, that I learned in the Valley and I think it's almost irreplaceable."
?? Actionable takeaway: Despite narratives of decline, Silicon Valley remains invaluable for founders due to its unrivaled concentration of talent, mentorship, and funding opportunities. Its culture of entrepreneurship stimulates innovation and risk-taking, creating an environment for startups that's difficult to replicate elsewhere.
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