Stu Sjouwerman. He’s a serial entrepreneur and currently the founder and CEO of KnowBe4.com. He’s a big Shark Tank fan. He’s based in Tampa, Florida.

Famous Five:

Favorite Book? – Positioning
What CEO do you follow? – Elon Musk
Favorite online tool? — SurveyMonkey
How many hours of sleep do you get?—6
If you could let your 20-year old self, know one thing, what would it be? – “I wished that my 21 old self knew that Bill Gates was going to go into Windows server, in about 1995”

Time Stamped Show Notes:

01:21 – Nathan introduces Stu to the show
01:46 – KnowBe4 is a new school IT
- 01:51 – KnowBe4 focuses on modern security and awareness training
02:08 – KnowBe4 is a SaaS company
02:46 – Average pay per user is $15/year
- 03:01 – The charge is annual upfront which is easier and most people prefer that
03:26 – KnowBe4 focuses on organizations with 50 users and up
03:36 – Average seat size varies
- 03:52 – Average seat size for SMBs is 200-300 and for enterprise 1500-3000 seats
04:21 – Stu sold his anti-virus company in 2010
04:35 – It was called Sunbelt and Stu’s 4th startup
04:56 – “We are growing like crazy”
05:01 – KnowBe4 did $7M in 2015, $24M in 2016 and is targeting $50M this year
05:26 – KnowBe4 does inbound marketing and they send newsletters to their list of 1.2M people
- 05:40 – The list was built over several years
05:57 – KnowBe4 was bootstrapped for 5 years and Stu spent around a million building the company
06:07 – In December 2015, they took $8M from VC
06:47 – Total fund raised was $13M
07:11 – It was easy for Stu to let go of 20% of the company
07:25 – Stu’s told Kevin Mitnick that he would give him 50% of his company in exchange for Kevin’s 30-year experience in hacking
08:34 – The cap table
09:10 – Stu is confident that KnowBe4 will earn $50M this year
09:20 – Churn is 15% annually
09:33 – It is relatively easy to predict whether a SaaS model will be profitable
09:43 – KnowBe4 serves 9500 companies
09:55 – Average ARR
10:22 – March revenue
10:58 – Enterprise sales come in March
11:10 – Team size is 290
11:27 – CAC is around $2600
11:39 – CAC to LTV ratio is 7
12:02 – CAC payback is instant
12:17 – Average selling price per year
12:42 – Stu likes Vladimir Putin
14:03 – Eagles programs are state-sponsored programs that are offensive cyberattacks
14:49 – USA also has offensive cyber weapons, same with China and Russia
14:58 – Hackers go after the weak link in IT security, which is the human
- 15:15 – It comes in the form of an email
15:33 – KnowBe4 sends frequent phishing attacks that are similar to legitimate ones
- 15:43 – This will make the team aware and cause them to be on top of their toes in case they receive an attack
16:02 – KnowBe4 has a phish alert button
16:30 – KnowBe4 trains people with the real stuff
16:41 – Stu used to play soccer and is very competitive
16:49 – Stu has 2 reasons why he wants to go public:
- 16:52 – First, because he has never gone public before
- 16:57 – Second is to expand further and faster
17:12 – KnowBe4’s biggest competitors are PhishMe and Wombat
17:26 – Stu gets their competitors’ information from Owler
17:45 – There’s a possibility of Stu acquiring one of their competitors once they go public
18:11 – Stu got $10M from his previous exit and he’s NOT doing KnowBe4 for the money
18:57 – The biggest problem Stu had with his previous company was social engineering
19:08 – “Nobody is really taking care of the human IT security”
20:30 – The Famous Five

3 Key Points:

There’s a big gap in human IT security and more and more people aren’t even aware they’re being hacked.
Going public can help a company expand further and faster, and perhaps even acquire the competition.
There is no such thing as retirement.

Resources Mentioned:

The Top Inbox – The site Nathan uses to schedule emails to be sent later, set reminders in inbox, track opens, and follow-up with email sequences
Klipfolio – Track your business performance across all departments for FREE
Hotjar – Nathan uses Hotjar to track what you’re doing on this site. He gets a video of each user visit like where they clicked and scrolled to make the site a better experience
Acuity Scheduling – Nathan uses Acuity to schedule his podcast interviews and appointments
Host Gator– The site Nathan uses to buy his domain names and hosting for the cheapest price possible
Audible– Nathan uses Audible when he’s driving from Austin to San Antonio (1.5-hour drive) to listen to audio books

Show Notes provided by Mallard Creatives

716: Putin is Making This Man $50 Million Per Year

SaaS Interviews with CEOs, Startups, Founders