KnowBe4: M&A Helping with Global Expansion
… export North American culture, that it will just work because we know it won’t. So we want to find what’s great there and then grow it.
And then there [are] upcoming acquisitions as well. There’s one that we’ll announce (soon), and there’s potentially another one that we’ll announce within the next three months. Right now it’s a 90 percent yes, and that’s going to be a big acquisition.
CF: The one that’s going to be announced soon is all about security culture. What’s the significance of security culture?
PC: KnowBe4 really started focusing on phishing; that’s one human-behavior element that you can capture and you can measure, and you can try to train. And so we created around that the Phish-Prone Percentage, which is somebody’s propensity for being phished, and that was a good reporting metric. Last year, we released the Virtual Risk Officer and the reporting around that, which was not just a behavior, but a cluster of behaviors and the propensity for being targeted for certain attacks, so like a FICO score for risk. The acquisition that’s coming soon gives us the ability to take that to the culture level. When you think about culture, that’s the aggregation of a group of people’s behaviors, their thoughts, their beliefs and the way that they approach any situation. So it really is that third tier. You start at the individual behavior, you focus on clusters of behavior, and you focus on clusters of clusters.
CF: Are there increasing opportunities for partners, and is that tied to the acquisitions taking place?
PC: I wouldn’t say it’s tied in part to the acquisitions. I think it’s just market opportunity. This is still a vastly untapped market, so if we’re entering and we’re doing this well in a vastly untapped market, you can imagine the possibilities for partners because we can grow at a very rapid rate like we have – we’ve been in hypergrowth mode for the length of the company’s existence – and that doesn’t seem to be slowing down. But we can only add warm bodies to chairs internally, and with the quality of training and excellence that we want with our people at a certain rate, partners and that entire ecosystem, they’ve done a lot of the vetting and the quality checking for us at times. So if they’re bringing on really good people and they’ve got a solid track record, and they’re invested in their success and our success, then it’s a win-win situation.
CF: Is what cybercriminals are doing impacting KnowBe4’s strategy and a reason why that continues to evolve?
PC: A lot of it is confirmation. So I would say 80-90% of what we see cybercriminals do is confirmation that we’re on the right track. Every now and then … we see leading indicators that might involve new paths for training, but really they’re rooted in all the old things that we always talk about. It’s the same psychology embedded in that, but the technology is revealing new ways to expose that. A lot of the things that we see in the future or the trends coming up revalidate the past work, but they give a new face to it and a new nuance that we have to tease out.
CF: What’s ahead this year for KnowBe4?
PC: We continue to work on AI and machine learning. We have some really good advances there and releases last year in what we internally code name AIDA (Artificial Intelligence Driven Agent). So there will be some announcements and some discussion, but those are a little bit further off. Because we’ve been innovating so fast … what we really want to do is spend a decent amount of time ensuring that the stack that we have is stable and scalable and basically infinite. We’re attracting the attention of the largest companies in the world, and so what we don’t want to do, as we innovate as fast as we do, is …