2304 - Understanding the Importance of AI Visibility and Control in Modern Business with Lanai's Lexi Reese

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0:58With us right now, it's Lexi Reese. Lexi, you are the co-founder and CEO of Lanai. You're found on the web at withlanai.com. Lexi, it's great to have you. Thank you. So happy to be here. Your 2000th guest or something, John. Something like that. We've been around for a little while. You are in the heart of Silicon Valley or Palo Alto. And I would be really excited to talk about Lanai, what you do. Before we do that, I always love hearing what high-level achievers do in their off time. I find that most of us are multi-passionate and usually kind of really get into stuff. What do you do when you're not at work for fun, or what have you been really into lately?

1:47Something I have been really into is, well, I've read a book called Vera or Faith. That's the title by Gary Steingart. And it's about sort of a dystopian future, but a neuro neurodivergent little girl, she's probably 13. And the basic premise of the book is that in her neurodivergence, she makes the most sense of all. And this hits home because a friend of mine who was also 13, daughter just got diagnosed with being neurodivergent and atypical learners, like how do we make the world fit for them rather than them having to fit the world. Oh my gosh. My wife is going to love this. She's a licensed marriage and family therapist, and she works with a lot of neurodivergent clients.

2:36It's called Vera or Faith. And it looks like the author is Gary. Oh boy. Do you know how to pronounce that last name? Steingart. Steingart. Okay, great. Great. Awesome. Well, thank you so much for the, I always love a great book recommendation. So I've got it added to my queue right now. I'm going to share that with my wife. Thank you for sharing. So let's talk about the work that you do with Lanai. What is Lanai? Yeah. So Lanai is the first AI native observability and security platform. So we're building the infrastructure that allows leaders to see, secure, and scale high impact AI across their entire organization.

3:20Okay, we're going to get into that. So from your world, like, and maybe you could just give us a quick state of the union on in your work with your clients, what are some of the most important things that you would recommend to an audience of startup founders, you know, folks that have been, maybe they've been at the helm for five or more years? What should they be knowing based on kind of what you're observing in your world? Yeah, I think that we're in this era of blind AI mandates where CEOs will often say, we're going to be AI first. And there's always someone in the organization that has to manage that.

4:02So if you're a leader, I think you want to be a little smarter than that. And the advice I give is every organization now has two workforces. Don't treat AI as a set of tools. Think of it as a set of teammates, new teammates that add capabilities to every function you have, including in your product. And think about given what you understand AI is capable of, which is really sort of automating cognition or hard but repeatable tasks, where do you think a teammate who can do really hard repeatable tasks could shape your business? And where would you see that show up? And just like you decide your hiring plan for the year, including how many people you're going to have in different functions, think about AI as something you're hiring to do a specific job.

5:04Oh, that's great. And then just like you would never not manage your human workforce, think about how you're going to manage your AI workforce to drive those outcomes. But I think that too often CEOs start with the like, we love technology, let's be AI first, as opposed to we're in business to serve customers and we need team members who do a great job doing that. So how can AI serve your customers better? Great frame. And I'm excited to explore that. But so obviously, if someone executes poorly, right, and let's just say we end up running a bunch of experiments and, you know, that has the potential to cause friction, obviously, operationally, internally, potentially.

5:59Obviously, you know, if we're thinking about things that are front facing or customer facing, well, that can be embarrassing. You know, if a new employee, your AI implementation does some stuff that is just like, whoa, that is so not our brand. That is off brand. That is not, you know, that happens. Do you mind maybe, let's tell some horror stories, if you could, about improperly executed AI, which I'm sure you've observed or seen or heard, you know, kind of the postmortem of. And you're like, whoa, heavens, let's fix that. Yeah, Lanai is often the cleanup crew when that happens. So I will share, I can share a bunch of stories.

6:40But I will just step back and say, I have never in 30 years of working and being very much at the forefront of the internet revolution, the change to SaaS, the change to mobile. I've never seen anything as fast as the deployment of AI in workplaces big and small. And at this point, businesses are spending probably between$500 and anywhere between$500 and$2 ,000 per employee per year on AI tools. Those generally include a general LLM, like a Cloud or an OpenAI or a Gemini, and then specific functional tools like Cursor for coding or something else for their sales and marketing organization. So you have all of these tools.

7:31But if I ask literally anyone, and I've had 300 conversations in this year alone, who's using AI in your organization? I'm not quite sure. Why are they using it? How risky is it? What parts do you want to scale and what parts do you want to avoid scaling? Nobody has good answers to that. So just stepping back, Lanai exists to give answers to all of those things. We're like data dog for AI interactions. But as such, we hear a lot of stories. And more importantly, because we're prompt level observability tool, we see what people are putting in prompts and real time analyze those for risk level to prevent any risk from going out.

8:19But here's one story. Before Lanai, a large insurance provider had a sales force that was suddenly increasing their upsell goals. They were hitting their upsell goals much earlier in the quarter. The company had an AI council like most people do. And the salesperson came to the AI council and was like, yeah, my team's using a lot of AI and we're blowing our upsell goals out of the water. The head of data science and the CIO said, wait a second, how are they doing that? The salesperson didn't know. They were just looking at the metric and declaring victory. The data science and CIO people look, AI has been injected into a very common, well-known sales CRM.

9:05And the sales team was no longer going to data science to do a propensity model for who they should call next. They were just uploading blank customer lists. Well, in the insurance industry, when you upload zip codes, that's a proxy for risk. And it has a huge fine that comes with it, multi-million dollar fine. And this example I really love because it shows employees, if it's on their desktop, they're going to assume they can do it. And they're not being malicious. They're trying to be personally productive. So if the CEO has been out there saying, use AI, use AI, be AI first, they're doing that.

9:46They just inadvertently, right idea, wrong execution, slightly nudged could be amazing for the company. Unnudged becomes a real risk. Lexi, thank you so much. Do you mind sharing just a little bit about when you are working with a client, what does that look like? How do you engage with your clients? Yeah. So, Lanai, we have a wait list. First of all, we're in beta and doing design partnerships, but anyone can go to withlanai.com and sign up and we'll definitely do a consultation. we operate as a browser extension we've my co-founder co-invented virtualization which is effectively cloud technology that makes us speaking over zoom possible and together we've come up with the first of its kind technology that enables us to deploy a browser extension in your environment that's effectively monitoring the traffic of how employees use ai but the first thing we do is detect that there's an AI interaction between a human and NA AI that might exist.

10:56The wow moment is, oh my gosh, I thought I had seven tools, but a healthcare organization we work with had 34. So they call them sanctioned tools versus unsanctioned tools. And CISOs refer to this as shadow AI. So we are doing all that detection at the browser's edge, which for any tech geek who's listening will find that very cool. No data leaves the perimeter of the organization for us to surface the insight that here's how many interactions are happening across sanctioned and unsanctioned tools. Then we use AI to analyze the prompts themselves to be able to assess use case. Oh, this is for marketing copy generation, or this is code review and risk level.

11:45Does this have PII or PHI in it. All of that gets surfaced as like a big map, that big, beautiful map of who's using it, why, how risky is it? We deploy in half a day with your IT team. You have insights in a week. And as we work with companies and feel comfortable that we understand their data and their policies, there's inline prevention. So it's not just data leak detection and analytics. It's actually prevention and nudges for good behavior. Yeah. Lexi, you have an interesting background. So as a former Google executive, you also ran, you threw your hat in the ring to run for Senate in California.

12:34Do you mind sharing just a little bit about your background and how that informed the work that you're doing today? Yeah, I mean, I've always been attracted to infrastructure problems or opportunities that shape how people live and work. So whether it was finance at American Express or running the programmatic advertising system for Google, which was ML advertising before it was cool, and it became Google's third largest business. and then running a compliance platform called Gusto from very small unicorn I really saw AI as the next big infrastructure challenge because there was all this money being spent on models and like how big were the models and how beautiful were the models but so little attention paid to how are leaders of workforces actually going to use AI to drive outstanding customer outcomes?

13:37And how are we going to train every person to be a safe AI power user? So the Senate run is way more like a startup than people think. You are the product. You have to go to market with a double-sided marketplace of funders and raise money to acquire voters. That's your cost of acquisition. I thought and still think that we are woefully under-resourced in our government to work productively with technology to serve citizens. I obviously did not win, but I hope I gave people a run for their money to say, how could we have no technology leaders in our Senate that makes the government laws that we all are subject to.

14:25You get a lot of folks legislating in ignorance or, you know, whoever happens to be the, you know, largest voices in the room is my, you know, kind of my outsider observation. And that's not necessarily best for the people. I don't know. Yeah. Yeah. Yeah, I mean, I think when you examine it, another podcast, we can explain that more. But I think we'd be benefited if most people looked as hard as they look at, while e-school technologies could disrupt old incumbents that are no longer serving customers, if we looked at political candidates like that, we may have different outcomes of who enters the race.

15:11Well, again, I think nearly everyone would agree that the next few years, we're going to be crossing some pretty serious chasms when it comes to how AI integrates, continues to integrate with our everyday life at every level, both at the enterprise SMB level and the personal consumer level. there are a lot of important considerations and certainly a lot of ethical conversations that we're having right now. But in my opinion, probably not enough of those conversations. So I'm championing you, Lexi, whether you run for office or again, with your work with Lanai, your website is withlanai.com. For a friend that's listening, who should be reaching out?

16:00I know that You offer demos. Who would be a really perfect person to come in and get a demo? And also, if you wouldn't mind maybe sharing if you have other resources that you'd recommend for about anybody who's interested in your thought leadership. Yeah, sure. And I think the premise for Lanai is really simple as it relates to what you were just saying of here's this massive transformation and people are making all sorts of predictions about what it will do in their business and their community. The bottom line is you cannot manage what you can't see. And we just make AI visible, the interactions humans and AI are having so that you can confidently move into a safe position.

16:46And the name Lanai comes from a customer saying, oh, you help us lean into AI safely. So to that end, it's usually if you're a large business, a CIO or a CISO. If you're a small business, honestly, it's the CEO. We're working with businesses, a thousand employees and up, and it's often the CEO and the head of IT because they don't have a CIO yet. But it's anybody who is responsible for both managing the acceleration and mitigating the risk of AI adoption at scale. And we usually either, as I said, are coming in after a terrible event has happened and people are saying, how did this happen? and they look online and they find, oh, you know, Lanai can detect sensitive data going into a prompt and prevent it from leaving your perimeter.

17:43Or it's really from people who say, gosh, I have power users. I know they exist. I want to highlight their work at scale. So who are the champions and how do I find and map their behavior and then share that with others so that they're doing the same thing. And the combination is the people that reach out to us, either they want to drive adoption or they want to mitigate risk or more often they're trying to do both. I love it. Lexi Reese, co-founder and CEO of Lanai, found on the web at withlanai.com. Lexi, thank you so much for the conversation. So great. Thanks for the great questions.

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