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3 Strategies I Used To Scale SecurityScorecard to $70M ARR, 1,700 Customers, & $200M in Cash

A fast-release experiment framework, customer focus tied to revenue, and the CEO's role in capitalization

Aleksandr Yampolskiy · Security Scorecard

Published September 6, 2024
About this resource
Format
SaaSOpen 2024 NYC
Length
15 min video
Inside
9 key moments
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What you’ll learn

Topics covered: Maybe you've seen one of their free reports or…; You maybe have seen their their reports floating around…; That cap table right that pie chart a little….

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Key moments

Find the ideas you need and go straight to the source.

Maybe you've seen one of their free reports or…

“maybe you've seen one of their free reports or use them in a plg motion we're going to dive into the full growth story today potential IPO plans net dollar retention Revenue growth and more please help me welcome to the stage Alexander Yoli from security scorecard good to see man it's been way too long it's been way too long you remember that photo shoot from the the last time we were in your office that was fun I remember the photo shoot was a lot of fun and I think we hav played football you k”
Watch at 00:00

You maybe have seen their their reports floating around…

“you maybe have seen their their reports floating around in terms of the plg bottoms up motion uh Revenue growth goes like this and you've gotten to this point using and you call it sort of your experimentation framework so let's spend about a minute and a half on this framework help us understand what we learn from these two tests look the big lesson in the past 10 years is that ideas we thought were good end up being bad and I and many ideas we thought were bad ended up being good right so on t”
Watch at 03:23

That cap table right that pie chart a little…

“that cap table right that pie chart a little bit uh because it's a theme right folks are thinking about how do they capitalize the business you did your first round in 2014 2 million on 6.2 post let me just ask you this looking back at the ceed all the way through the series D any regrets about how you structured any of these deals or the timing so the one thing that I really was careful and the previous speaker spoke about it make sure to nego like the valuation matters a lot less than all the”
Watch at 06:47

Somebody needs to be in charge and control the…

“somebody needs to be in charge and control the board I'm an investor I'm an angel investor into about 23 24 different startups at different stages um and the number one reason why many companies fall apart as founder conflict so make sure found confidence founder conflict conflict yeah so make sure you really love kind of your co-founders so and the same for your exact team you need to be on good terms you need to enjoy presence of you exec so my conservative modeling puts you at”
Watch at 10:11

CEO responsibilities

“Set strategy Ensure company has cash Hire and empower team CEO Job”
Read slide 17

Strategy execution

“Set strategy Ensure company has cash Hire and empower team CEO Job: 3Hag, XRay, OKR. How do you execute Strategy? Service Customers, Drive GRR Are you being provocateur (situational leadership)”
Read slide 19

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About the speaker
Aleksandr Yampolskiy

Aleksandr Yampolskiy

CEO & Co-Founder · Security Scorecard

LinkedIn

Dr. Aleksandr Yampolskiy is a cofounder and CEO of SecurityScorecard, the leading security rating company, which is used by over 2,500+ top companies, like Pepsi, McDonalds, Sallie Mae, and many others.

Previously he was a CTO of BlogTalkRadio, the largest online radio network averaging over 40 million visitors a month leading to its M&A. Prior to that, Alex was a global CISO at Gilt Groupe companies, during its growth from 200 to over 2,000+ employees and 600M in revenue. Before that he worked at Goldman Sachs, Microsoft, Oracle and other companies as a lead technologist. He did his Ph.D. in Cryptography at Yale University.

He is an active speaker and writer in top media publications like CNN, New York Times, Wall Street Journal. He is also an angel investor into top disruptive startups. He lives with his family in Brooklyn, and enjoys working out, chess, arts, and travel.

Company revenue
$106M
Team size
528

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Slide by slide

Each slide with a short explanation of what it shows. Open the slide text for its exact wording.

22 passages

SecurityScorecard growth context

  1. Slide 1Open deck
    Slide text

    SaaSOpen, September 2024 3 Strategies I Used To Scale SecurityScorecard to $70M ARR, 1,700 Customers, & $200M in Cash Aleksandr Yampolskiy CEO & Co-Founder, SecurityScorecard

  2. Slide 2Open deck

    Revenue climbed from $0 to $130M

    SecurityScorecard's revenue grew slowly at first, then sharply in later years. The chart labels $0 in 2013, $2,500,000 in 2015, $11,000,000 in 2018, $43,000,000 in 2020, $71,000,000 in 2022 and $130,000,000 in 2024.

    Slide text

    Security Scorecard Revenue Growth

The three strategic themes

  1. Slide 3Open deck

    Agenda: customers, experiments, CEO's job

    The talk is organized around three topics for the next 20 minutes. They are customer focus driving revenue growth, an experiment framework for releasing updates fast, and the CEO's job including capitalization.

    Slide text

    Experiment framework we use to release updates fast Customer Focus Drives Revenue Growth CEO’s Job, Capitalization Over the Next 20 Minutes

  2. Slide 4Open deck

    Starting point: no standard for security performance

    The company began with no gold standard to measure and communicate security performance. The diagram shows a company graded B, with vendors rated from A to F, and asks how to know if third and fourth party vendors protect data. Stats cited: 63% of breaches linked to third parties, 583 third parties on average, 67% seeing attack surface expand.

  3. Slide 5Open deck

    Today's product targets supply chain risk

    The current SecurityScorecard homepage is shown under the headline "Secure your supply chain". It promises to reduce third-party incidents by 75%, pairs a vendor risk dashboard with calls to start free or explore the platform, and lists well-known customer logos.

    Slide text

    Today

  4. Slide 6Open deck

    Revenue growth accelerates in the later years

    SecurityScorecard's revenue chart rises from $0 in 2013 to $130,000,000 in 2024. The later bars show much larger increases than the early years.

    Slide text

    Security Scorecard Revenue Growth

Experiment framework

  1. Slide 7Open deck

    Section: Experiment Framework

    Section header opening the part of the talk on the experiment framework. It marks the shift from the company's revenue story to how ideas get tested.

    Slide text

    Experiment Framework

  2. Slide 8Open deck

    Cheap weekend project beat a four-month build

    Ideas judged good or bad in advance often turned out the opposite, so organizations overvalue great ideas. The big win was an instant security score built in a 2-day weekend project by a developer. The big flop was the Breach Multiplier, which took 4 months and a 10-person team.

    Slide text

    Security Scorecard Revenue Growth

  3. Slide 9Open deck

    Run cheap experiments using the 5x5x5 rule

    Cheap, quick experiments outweigh great ideas and speed up adaptation. The 5x5x5 framework from Michael Schrage sets 5 people or teams, 5 days and 5 business experiments, each costing no more than $5,000 and aiming at $5M in savings or revenue potential.

    Slide text

    Security Scorecard Revenue Growth

Capitalization and funding

  1. Slide 10Open deck

    Section: CEO job and capitalization

    Section header introducing the part of the talk on the CEO's job and capitalization. It signals a move to funding and leadership topics.

    Slide text

    CEO Job, Capitalization

  2. Slide 11Open deck

    Section: Capitalization

    Capitalization is introduced as a distinct topic. The section card contains no funding figures or further detail.

    Slide text

    Capitalization

  3. Slide 12Open deck

    Funding History

  4. Slide 13Open deck

    Six funding rounds from 2014 to 2021

    SecurityScorecard raised money in rounds that grew steadily in size and valuation. The first was $2.2M at a $6.2M valuation in January 2014, and the latest was a $180M Series E at a $980M valuation in March 2021. Source: GetLatka.

    Slide text

    Funding History Source: GetLatka

  5. Slide 14Open deck

    Founder stake fell from 50% to 10.24%

    Each round sold more of the company, so Yampolskiy's ownership dropped from 50.00% in 2013 to 10.24% after the 2021 Series E. The table lists amount raised, post-money valuation and percent sold per round. It assumes no ESOP and a 50/50 founder split at start.

    Slide text

    Funding History Assumes no ESOP and 50/50 founder split at start

  6. Slide 15Open deck

    Smaller stake still worth about $102M

    The dollar value of each founder's stake grew at every round despite dilution. Yampolskiy's stake is shown at $102,418,417 after the 2021 Series E, matching his co-founder's. The table also shows the amount each investor round was worth, under the same no-ESOP, 50/50 split assumption.

    Slide text

    Funding History Assumes no ESOP and 50/50 founder split at start

The CEO role and execution

  1. Slide 16Open deck

    Section: CEO Job

    A section card introduces the CEO's role. It contains no further responsibilities or examples.

    Slide text

    CEO Job

  2. Slide 17Open deck

    CEO job has three parts

    The CEO's job is framed as three responsibilities: ensure the company has cash, set strategy, and hire and empower the team.

    Slide text

    Set strategy Ensure company has cash Hire and empower team CEO Job

  3. Slide 18Open deck

    Question generic executive advice

    The slide warns about generalizations from "executives". The same three CEO responsibilities (cash, strategy, hiring and empowering the team) each carry a prohibition sign, suggesting such blanket advice should not be taken at face value.

    Slide text

    Set strategy Ensure company has cash Hire and empower team Be Careful with Generalizations from “Executives”

  4. Slide 19Open deck

    Asking how to execute each CEO duty

    Each CEO duty gets a more specific question. Ensuring cash is tied to servicing customers and driving GRR, and setting strategy is tied to how to execute it with 3Hag, XRay and OKR. The slide also asks whether you are being a provocateur, calling it situational leadership.

    Slide text

    Set strategy Ensure company has cash Hire and empower team CEO Job: 3Hag, XRay, OKR. How do you execute Strategy? Service Customers, Drive GRR Are you being provocateur (situational leadership)

Growth journey and summary

  1. Slide 20Open deck

    A journey of repeated ups and downs

    The company's path is drawn as a zigzag of peaks and troughs rather than a straight climb. Lows include a competitors lawsuit, technology challenges and turnover, COVID, and slowness from interest rates. Highs include product/market fit with Aetna, a 180M+ Series E and marketplace apps. A "Here" marker sits before profitability goals and an IPO.

    Slide text

    Our Journey

  2. Slide 21Open deck

    Recap of the three topics

    The closing recap repeats the three topics covered: customer focus drives revenue growth, the experiment framework for releasing updates fast, and the CEO's job including capitalization.

    Slide text

    Experiment framework we use to release updates fast Customer Focus Drives Revenue Growth CEO’s Job, Capitalization In summary, you just learned:

  3. Slide 22Open deck

    Thank you from the speaker

    Closing card thanking the audience at SaaSOpen, September 2024. It shows Aleksandr Yampolskiy's photo and title, and gives an email address inviting contact with the speaker.

    Slide text

    SaaSOpen, September 2024 Thank you! [redacted email] Aleksandr Yampolskiy CEO & Co-Founder, SecurityScorecard