From NASA to nine-figure ARR: Adam Markowitz on building Drata, trust and timing in SaaS

0:28We fell in love with the problem before the solution. interview SaaS founders from around the world who've been there and done that. They share the ins and outs of how they built their businesses, their operations, their path for securing investment and more. Our mission with the podcast is to help you, the founder, learn how to scale your SaaS, maintain your wellbeing and navigate the complexities of this ever-changing industry. I'm your host, Alex Deema, and together we'll explore the good, the bad and the ugly in the journey to SaaS success. All right, welcome to the SaaS Revolution show. I'm your host, Alex Thumer, CEO and founder of SaaSDoc, also general partner of BackFuture Ventures.

1:06Delighted to be joined today by the co-founder and CEO of Drata, Adam Markowitz. How are you doing, Adam? I'm great. Thank you, Alex. Thanks for having me. Good to have you on. I don't know if that is a cowboy hat in the background but then there's also a nice picture of like good sunset and some good weather and a glow it's leading me to ask you you know what part of the world uh are you in right now adam i'm in southern california i'm in san diego um yeah that's funny i just realized yeah there's a picture of some waves and the beach it's very appropriate yeah and then and the hat is is that a san diego southern californian hat that's not that's a that's a gift from a family friend in texas there we go about well a texas hat and texas is a place as close to our heart as we do sassel usa in uh in austin um so uh a big fan of austin but haven't spent a summer there i've heard it's particularly hot so uh and i hear people that live in austin don't spend their summers there either so uh you know that that's another story but adam thank you so much for coming on the show um and you know paying it forward to the sassel community we always like to get to know our guests in the first instance.

2:19And so we'd love to know who is Adam Markowitz. Adam Markowitz is a father and a co-founder and CEO of Jurada, an agentic trust management platform. But yeah, it wasn't always the case. You can give us some background if you want. Yeah, well, I understand. I didn't know this, and I'm sure the listeners didn't know this, but in terms of your background, you had five years of working at NASA on the space shuttle program. Coincidentally, there's a great documentary on the BBC at the moment around the space program, which I've caught a bit off, but would love to learn more about that and how you came from that to moving from being an aerospace engineer to being an entrepreneur.

3:10It's a big shift. I'm sure many others have done it, but you're the first I've spoken to. yeah i don't know how common that path is but uh i like i said i grew up in southern california in the 90s and so the nasa space show program was was at its heyday that's the initial inspiration for the four-year-old in me to always want to be an astronaut and i've never grown out of that i still would love to be an astronaut one day um but uh that that led me to yeah an educational background in aerospace engineering and then astronautical engineering for grad school in from actually san diego's first undergrad i studied aerospace engineering at uc san diego and like i said astronomical engineering at usc afterwards and started my career in working on that very program the space shuttle program that inspired me i was there for the tail end of the program uh no one knew it was the tail end of the program but i was there for it uh and they They retired, NASA retired the space shuttle fleet in 2010, 2011.

4:14I like to say I retired along with this great shuttle program, at least from aerospace to start a company that was based on a problem I experienced and solved for myself making transition from college to career. I landed that job working on the Space Shuttle program by bringing a portfolio into my job interviews alongside my resume to help prove the skills that I was listing on that very resume with evidence, actual evidence of the project, papers, presentations, the things that I said prove the skills and competencies that I was claiming to have. and that was the initial for a company I started called Portfolium over a decade ago now here in San Diego it was like a LinkedIn for college students as you could call it centered around any portfolio with their academic work and it was a lot we learned a lot I say we myself they let you co-founders we first time founder for me selling a product in ed tech we learned a lot real quick and a lot of it the hard way.

5:15I said we cut our teeth in ed tech, but it was an amazing journey, seven and a half year journey. I'm selling into hundreds of schools, bringing millions of students into this network and helping them connect their learning with opportunity and earning trust by proving they deserve it. That was our motto. And the best way to earn trust is to prove you deserve to approve with evidence. Selling software into universities, especially a social network of sorts, led us head first into the problem that we then set out to solve with Drada. and that was how do we ironically earn the trust of these customers with the sensitive data that they're handing us in this case universities handing over sensitive student data and needed assurance of our security posture they needed us to prove all the things we said we were doing when it came to our security and compliance and so that ultimately led us down the path to build tools to streamline to automate and then eventually build Jurada as a standalone company after Portfolion was acquired in 2019.

6:13How crucial in your thoughts is it or not that having had this one startup under your belt, you know, with that experience, all the learnings to the success of, I guess, scaling rapidly, you know, the second time, I mean, do you think, because I believe, you know, you've gone from one to 100 million ARR in, you know, only a matter of years with Drata, without Portfolium, do you think that would have been possible? I don't think it would have been, no. I think about it a lot, actually, because like I said, we learned so much so quick with Portfolium across every dimension, even though when you look at it over seven years, we never really scaled Portfolium.

7:04We never reached, I guess, meaningful, I should say, revenue scale. I should really clarify that. Our CTO is going to get mad at me because we scaled the product to support millions of monthly users, eventually millions in revenue, but never beyond 100 employees. And again, that was over seven and a half years. We withdrawed 100 employees in dozens of countries, thousands of customers, nine figure ARR, and that was all in less than three and a half, four years. So it wasn't like we had a playbook that we could just copy paste. We had a ton of experience, a ton of resilience, the initial team that we had worked with for quite some time, which was the ultimate superpower when we started Drada, especially during COVID lockdowns, being fully remote and having tight knit team that had spent years together in a very tough space.

7:56that said that was just a cheat code early on in 2020 and 2021 um but yes a lot of lessons learned that definitely helped us tactically as operationally strategically and then even mentally as founders within uh within the tough space well let's dig into the the drata story right and so as as we heard you know i guess the the fam with nasa or when working in nasa that sort of spawned the idea of, you know, problem that you had to build Portfolium. You know, with Portfolium, you know, there's a problem that you had which would lead you to, you know, understand why you wanted to, you know, go ahead and sort of build Drata.

8:42But as you said, like in three and a half years, you know, you've taken this company to scale, right? You know, one to a hundred million. We'd love to dig into that. And, you know, it's a big range, right? So there are obviously many stages within that, but you did it in a short time. Like, what are the lessons? Like, how have you done it? What can you share, you know, with the audience? So both companies, as you mentioned, it was a problem that we had experienced, solved for ourselves, and then set out to solve for the market, right? the difference with Drada there was a lot more say we fell in love with the problem before the solution the problem itself resonated so much with us because the product that we were selling to universities was meant to help students to be subgrads prove the very things they were saying on their resume and then when it came time for us to prove all the things we were saying when it came to our scary appliance class year the first time we were asked to we couldn't and that stung in such a unique way.

9:49We felt the problem so near and dear. And so there was so much empathy for all of our eventual customers who were going through that same problem. And yes, we started solving it for ourselves, building tools in-house at a portfolio for our own use case. So by the time that company was acquired and we saw how big that problem actually was, not just for ourselves, but for any company out there that was storing or processing customer data in the cloud, which is every company today. We were uniquely positioned to solve it at scale. And we didn't say, okay, let's go solve it. We still went out and talked to the market.

10:28We talked to dozens and dozens and dozens of potential customers to see how their pain was similar to ours, how they were trying to solve it themselves before we wrote our first line of code. To a degree, we just didn't do the first time around. And so I attribute that a lot to the immediate lightning and a model product market fit that we had at Drada, but we did not have with the EdTech company at all. And because we put the time and that effort in and we have that lightning and model product market fit, the appreciation for the problem, the opportunity to solve it, that fed this execution kind of virtuous cycle, I always point to this flywheel of, we know how big this problem is and how massive the opportunity is to solve it.

11:11We are uniquely positioned to do it. We're going to go do it. and when you see those results start to compound and the appreciation bills and the execution like around and around you go on this flywheel and that's been part of the secret sauce from day one but we went zero to 10 million that first year um which was about 10 times faster than we thought we were going to go which just shows how how immediate that part of market fit was which we know how rare it is how it is very rare and i mean most of the that because it's so rare i don't know what the percentage is right you know most of the founders that um you know i speak to within community over let's say the last 10 years it is just a real struggle to get to product market the majority will struggle uh to get there and that's why it's such a you know a hot topic yeah it never goes out of fashion right uh um at the startup stage and uh obviously being well it it's blessed by obsessing over the you know a problem you know getting into finding a a real problem with a massive market you know i'm sure you know creating a great product all the elements but maybe could you break down like the elements of like how you got to product market fit and and then when you got there um you know okay you realize you've got product market fit then what do you do as a company then to kind of capitalize on it you know where do you invest higher you know what channels etc you know how do you how do you compel from that yeah i mean a lot of things about strategy and execution execution strategy right um but there's also a timing element where that one you can you have the best strategy and the best execution and just not time it right and kind of miss way but i've got this this picture behind me it's surfing and so i always use the surfing analogy if like you're a little too far in front or a little too far behind the way you're going to miss it um no matter how perfect your your form is uh and so timing is one of those things where we we did get lucky there um now there's plenty of companies that went to attack this at the same time so they all got timing right and lucky they didn't have the right strategy the right execution or both and so you need all three in my opinion and um in terms of timing like we saw the the writing on the wall we when we experienced that problem it was at the same time that GDPR was coming online and as a multi-tenant social network, implementing the controls to comply with GDPR was, again, a real pain that we felt, we experienced, was solved.

13:41And then over the next couple of years, we were on the front lines, seeing the problem growing, seeing the need for that assurance, that third-party vendor risk process, different standards in frameworks like stock two, going from a nice to have competitive advantage to all of a sudden we look around and everyone has it. If you don't have it, it's a problem. Kind of see this compounding to the point where where's the pot going here? This is now something that every company is going to be expected to do. They don't have the resources to do it or the experience to do it. We know that because we felt it.

14:19And so the timing, I always stress just the timing of it. once we launched and you see the repeatable motion, we went from founder-led sales to having a sales team within a matter of weeks. And we had amazing folks that were with us at the prior company that were those initial sales folks. And so things that in a prior life where maybe more commonly, you have to go through these transitions, founder-led motion to a more repeatable motion that you can scale. And we have to do everything on fast forward. That's why I said to your original question, if we didn't have the prior experience of going through it in a more slow kind of traditional sense, we wouldn't have been as quick to make adjustments to the process.

15:03We would be able to keep up with the demand and what a horrible problem that would have been because these opportunities are so rare. The window is open for only so long. So in 2020, 2021, we officially launched, that window was open and we took full advantage of it. the execution was our way of showing our appreciation for the customer problem and the opportunity itself. That was part of the initial culture, the DNA of the company, and that's the folks that we attracted. And so operationally, the things that we set up to be able to keep up with the demand, having things like day one when we launched this automated inbound lead routing.

15:41Again, if we hadn't set that up in a prior life and didn't have that ready to go on day one, inbound opportunities would have split through the cracks because there just wouldn't have been automation there. And so to have folks joining in their calendars, filling up with opportunities and a whole demo environment already ready to go. These were things that just helped us go so fast. And speed was really the, it still is the ultimate competitive advantage. We also took a partner heavy approach pretty early. And I achieved a lot of the success to that because that's one of those things, again, culturally you have to embed within a go to market motion or it's as tough to kind of inject a shoehorn in later.

16:17So, you know, hats off to the amazing team that helped us do that. Just on that, because I think also another one of these things that certain companies get the partner model right and you've cracked that. But I think the majority are kind of sitting on the outside thinking like, you know, will the partner model work? You know, they haven't quite done it. Perhaps you can explain a little bit of like how you approached it, how it worked for you. it may not be a one size fits all having a partner model but why you went down that road and how it worked for you yeah no it's a good caveat i think any and all the devices it's never a one size fits all what works at one company in one space might not work in another even in the same space so um it's a good uh take everything with a grain of salt kind of caveat uh for us i'd say the one core piece that even let us know that hey maybe we should be taking a partner heavy approach here was just listening to the customer as silly and simple as that sounds being so customer centric from the moment we set out to solve this problem um listening to them understanding that a lot of these companies were prior to drada were working with some sort of msp mssp um that would come in and do this work and so these these teams were themselves looking for software that could help them do this faster in a scale and so we were able to work with them in a one-to-many fashion that could help us just accelerate our whole bit of market motion.

17:49But how we went about it is a whole other discussion. And again, have to get certain things right. I almost have to luck out with some of the initial partners that we did bring on because you can't partner with everyone. You have to really be with who you go after. I think we made some good decisions on who we partnered with and then built out a team to actually expand it to have different types of partners that we went to market with, whether they were tech partners, audit firms, channel partners. And today, channel, just the whole partner program drives over a third of our pipeline. Storage is there.

18:27They touch another third. So two thirds of our pipeline is sourced or an indoor influence through a partner. And that, again, unless that's done pretty early on, it's tough to shoehorn that in later because the direct motion becomes so predominant. What about yourself personally as a CEO? So again, just, you know, the rapid growth of the business, rapid growth of revenue, you often hear or often hear that, you know, CEOs have to reinvent themselves at, you know, the 1 to 10 billion, you know, 10 to, I don't know, 20, 20, 50, 50 to 100. Must have had to do a lot of reinvention if that's the case in a short period of time.

19:05You're like, I could imagine, maybe even myself, and we're not growing anywhere near as fast as you, but just thinking about, okay, like a reinvention of, you know, like 10 to 20 and spending a lot of time thinking about it, but you wouldn't have had much time to think about it. So how did you deal with that? Really good question. Because yes, the job itself changed very fast and continues to. But just the idea of, I mean, growth is changed, right? So everyone's role at the company has changed so rapidly. I mean, if you've been at Dorada for more than six months, your role, your remit has changed within that six months.

19:47And that's reprogramming our reins to remind ourselves that that's a good thing. That means the company is growing. We're seeing success. If it was the same thing every day, it means we're stagnant. We're not growing. We're not changing. So first was just like mentally accepting that. And I talked to a lot of CEOs who gave a lot of good advice. one always stands out and I won't I'll take what they said and then apply it to Drada but something to the effect of you know I set out to build a trust management platform but ultimately my job is to build a company that delivers a trust management platform so the idea of being a I mean maybe most co-founder CEOs are very product oriented they don't I don't know I shouldn't say most.

20:28I am a product and customer oriented founder CEO. So the idea of company building was never my main intention, but that is the job. And so surrounding myself with folks that complement those skill sets, those areas to do it effectively, that's been a must-have necessity for me. And so I've tried to make sure I have that right kind of compilation of folks around with complementary skill sets. It's another thing I always point to, too, even in the earliest days, having three co-founders, myself and two others that were the same co-founders from the prior company. So yes, there's that prior experience, that repeat team coming back together.

21:11That's a huge competitive advantage. But even the dynamic between the three, having very complementary personalities with complementary skill sets, right? There's a CTO, obviously, technical, running all of engineering. We had a co-founder, CRO, running all of go-to market and then you have myself just dabbles in both enough to be dangerous um can help kind of point and steer the ship and so i you know i never take that for granted because that was another huge reason why we were able to move as fast as we did um as early as we did speaking of of change like so you you launched in 2020 um you would say let's you know classify you categorize you as a traditional b2b you know software sort of like platform um but now we're in this ai era and you know over the last 18 months or so like sas companies will uh certainly have been encouraged and i'm sure would be the case in your side but uh um because there's a bit of an existential moment that if they if you don't move to become ai first that uh you know you may become irrelevant very quickly.

22:19So perhaps you could just share a little bit about your thoughts in terms of how you view this movement to become AI-first sort of businesses, what you've done internally, Pedrata, and also then what it means for the space and your customers. Yeah, maybe I can start with the last part there because I think it is the most be interesting for us the fact that what you just described every company out there needing to become ai first or adopt ai at a rapid pace like as an existential threat it don't um that is driving a whole new set of demand for the very platform now that we've built um and so any of our success to dates prior to the kind of call it jai boom i would i said it should be a lot to just riding the wave of the kind of cloud proliferation of sass when all this third party risk started exploiting because we're relying now more on more and more third party cloud vendors which then drove in you for that minimum bar of security assurance and the rise of a product like drada now every company needs to bring in ai specific vendors and there's a whole new set of risk criteria that need to be evaluated against and who is better positioned to help them solve that than a platform like Drada that's built this network of thousands of companies continuously monitoring and proving and showcasing that very security posture.

23:51So that has driven a whole new set. I keep saying that's got a magnifying glass over the very space that we set out to help build this trust management category. And so that's been a nice boon, as you can imagine. And again, I attribute it so much to the timing and execution because if we didn't launch when we did, if we didn't grow this network with thousands of customers, we wouldn't be so uniquely positioned to now solve this pain where our largest customers, our Fortune 100 customers, are calling us and saying, I have this mandate. My CFO has literally given us a green light, a blink check to build, bring in AI vendors because it's a huge, it's an existential risk to your point if we don't.

24:28And so how am I going to do that? We're already a customer of yours. This has to be something you're building or if not already built, and sure enough, we want your agent to trust a vendor risk management offering that does exactly that. So that's kind of the first thing I always have to point out when it comes to the AI boom. It's also driving a new set of regulation and the set of frameworks that our customers have to go comply with. The number one hand raiser right now for our customers is the need for them to go comply with ISO 42001, AI-specific framework from ISO, right? And so, and then there's the, they say iOS manager framework, there's more around the corner.

25:11And so this is just adding to the stack, adding to the otherwise very manual, painful problem of needing to comply with multiple frameworks at once continuously. That's one of our bread and butter use cases, at least the one we initially started with. And so we have the most repetitions with. And then, yes, of course, our style, we are not unique to this AI boom. we are bringing in ai solutions ourselves we have been embedding ai into the product for the last two years from both uh i guess all three layers of the cape from the embedded ai the on-demand kind of chat ai and then our purely agentic offerings as well so um yeah it's at the highest level it has just brought a whole new set of demand to the very category that we set out to to build and what what about thanks for sharing that what about uh your own personal use of ai on a on a day-to-day basis and that like versus also what are the team you know what what tools are the draft team like deploying that you can share uh you you know for their use whether it's for gtn you know motions or you know other departments every department um almost in a uh The competitive fire that's part of our culture really shows up in terms of how folks are adopting AI to improve efficiency and productivity, both in many cases.

26:30And I would say maybe it started on product engineering in terms of tooling to help them out, from writing code to building prototypes to writing tickets and stories. But other departments quickly caught up and in some cases even surpassed. And I would put marketing top of that list in terms of their adoption and use of AI. Every leader of the company, every individual of the company, but especially our leaders, have had to kind of rewire their brains, myself included. How do we take an AI first approach to the problem? Not, hey, what tool can I go get? It's what is the actual problem I'm trying to solve or what is the thing that I'm spending time on that I really shouldn't be?

27:07and everything from, obviously, content creation, copywriting, actually creating the use cases, helping create the very tailored value metric, QDR decks for our customers every single time we get on the call with them, being armed with the right data to provide a better experience for them. Culturally, having that customer-first mentality helps narrow the focus of where we're going to go apply AI to the use cases, because what better place to start with than making the customer experience better? But yeah, it's been a journey like every company has been on, but it's one that we know is existential.

27:52It's a must across every department. Has it changed the way that you've gone about hiring? Are you looking for specific skill set? Does it matter if you've got a resume of an MBA from Harvard versus somebody that, I don't know, is an AI expert? And have you created a head of AI role or specific roles within the business around this new sort of era? We have on the product team, there's obviously a team of AI folks and engineers who are VP of product from AI product. But in terms of hiring in general, you're talking to someone that built a company in the ed tech space to help students from any university or any background prove their skills beyond just, you know, where they worked or where they went to school.

28:43And so we're very much a competency first potential for pedigree kind of mindset. I know it's so overused at this point, but the message to the team was, you know, AI isn't going to replace your job, but someone using AI will. And it really helps. And it's such a simple way of saying it. I know, again, Again, it's overused, but in terms of setting the new standard for how we think about solving problems, that's a great way to put it. What's next for Drata? How do you foresee not only maybe the next 12 months, but the next few years? Like I said, the AI boom has put a magnifying glass over the space in such a great way.

29:28It's only magnified the same problems that have always been there from a third-party risk standpoint in terms of security, privacy, confidentiality. So couldn't be a better time, the time is now for what we're doing. And the execution of the data has really opened up the opportunity to solve the bigger problem around trust management as a whole. So to start from compliant automation four and a half years ago to then have a modern automation GRC offering, a security assurance offering, and now even a risk of management offering. It really completes the full stack trust movement platform. And we talked about it, that a story of rapid growth, we want to continue to compound that growth internationally as well, where now 30 % of our customers are outside the US.

30:18We have teams in London and Sydney, as well as across North America. So it's been a rapid journey and it's only going to accelerate from here. I think we're probably most excited right now for this agentic render risk offering because we are so neatly positioned to solve it, which was always the plan. Plans don't always go the way you think they will, but when they do, it is pretty amazing. And like I said, the most excited I've been in such a short amount of time that we've been building to now unlock this bigger opportunity, The very problem that we set out to solve, we're just doing it much faster than we expected.

31:02Amazing. Well, I think it seems a clear sort of case study, like one not only of timing that you mentioned, but having real sort of passion for a problem and that really kind of helping grow and scale a company as rapidly as you have. So congrats on that, Adam. and sharing a story and the lessons with the SaaS-Ock community. Really appreciate it. Thank you so much for being on the podcast and hopefully we'll get to see you at one of the SaaS-Ock events the next year in person. Definitely. Thanks so much, Alex. Appreciate it. Thanks for listening to the SaaS Revolution show. If you enjoyed this episode, please leave a review and follow the show.

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