085: How to Grow a Cybersecurity Startup to $20M/year (with Jonathan Cogley of Thycotic)

Background on Jonathan Cogley of Thycotic:

Jonathan Cogley is the Founder of Thycotic & a Startup Mentor (👀 his blog @ Good Rain Shade). He grew up in South Africa and began his software engineering career in London where he founded Thycotic in 1996, moving Thycotic headquarters to the United States several years later. Under Jonathan’s direction, Thycotic has rapidly grown into an innovation leader in privileged account management software, used by more than 180,000 IT administrators worldwide.

In 2005, Thycotic Software launched their first successful software product in the enterprise security space called Secret Server , which allows IT infrastructure groups to manage privileged passwords. Secret Server has now grown to dominate that space in terms of marketshare . More sysadmins use Secret Server every day than any other privileged password management tool. The platform has continued to evolve with further tools and the acquisition of Arellia and CyberAlgorithms providing endpoint management and user behavioral analytics.

These days, Jonathan participate as a startup mentor either independently or with a few startup incubators – 1776 (has a broad reach globally with a wide variety of startups) and MACH37 (Washington DC-based cybersecurity startup incubator). This gives Jonathan the opportunity to talk to many startups and keep up to date on trends in different industries. He has spoken at over 100 enterprise technology events, appeared on The Wall Street Journal Radio, Fox TV and has been featured in notable publications such as The Washington Post, CNET, Yahoo! Finance, PC Magazine and CSO.

Time-Stamped Show Notes:

[0:57] Jonathan Cogley was born in South Africa, moved to London, and then eventually transferred to the United States when he was 24 years old. He owns a business that creates security software for various companies.
[4:17] When Jonathan left London 18 years ago and arrived in Pittsburgh for the first time, he noticed a lot of differences, which for him was almost like a culture shock.
[9:34] Jonathan left Pittsburgh to find more opportunities, and he wanted to do more and get to that next level. He was also wanted a different lifestyle that is more cosmopolitan than what Pittsburgh was offering him.
[11:00] Jonathan learned that as a consultant and software developer, he was always given the most challenging tasks and the projects that no one wants to do.
[13:43] Jonathan went to school in South Africa and hoped to become a microbiologist, but due to financial problems, he failed to continue his masteral degree, and he went back to programming.
[16:41] Jonathan’s company in Washington DC started when he began hiring people to work for him in order to finish a major project.
[19:01] Since he is now managing a team, Jonathan understands the risks and responsibilities involved. He was more of a coach by sharing his knowledge and experience to his team.
[21:15] On October of 2005, Jonathan and his team created a password management tool called Secret Server, which became the foundation of his Thycotic Company.
[25:39] At first, Jonathan was not sure if their Secret Server product was going to be a success. He thought about how he can make this endeavor grow.
[26:40] One of the earlier lessons he learned was “If you think something is going to work, get some sales power behind it.”
[31:15] In the first couple of years, Jonathan never took a vacation and worked even on weekdays. He didn’t have a co-founder and his company didn’t receive any outside funding, which means he has to work many hours each day.
[34:53] In 2011, one of Jonathan’s biggest client in the consulting side stopped doing business with them, which was a huge blow for the company. They survived this ordeal by focusing on the product side.
[41:41] Jonathan’s strategy for hiring people for his sales team is to get new graduates who have no experience but possess the right qualities to become a team player and can work well with the company culture.
[50:01] Currently, Jonathan does a lot of mentoring, mostly with startup companies and he has a website called goodrainshade.com.
[51:31] Jonathan admits he got tired and burnt out with the business. He did a lot of traveling and just relaxed during that time.
[52:44] Jonathan points out that it is important to have a unique product niche.

Fabulous 4 Questions:

📖📚 Favorite Book(s)? Made to Stick by Chip Heath & Dan Heath, The E-Myth Revisited by Michael E. Gerber, Getting Things Done by David Allen, The Secrets of Consulting by Gerald M. Weinberg, Elevate, Business of Software by Eric Sink
🙌😎 Favorite Amazon.com purchase? Probably bought more index cards than anything in the business (typically from Staples).
🌱💸 Favorite Tool that's GROWN your Business? Excel, Outlook, NAnt (back in the day)
💭💡 BIGGEST Challenge keeping your Business from GROWING? We now have a new management team backed by growth equity firm and growth is over 50% YOY but it tooks 12 years to get to this point.