Russell: [00:00:00] Thanks for downloading the 19th in our series of episodes of the csuite podcast that we’re recording in partnership with the European PR agency Tyto and their own Without Borders podcast, where we are interviewing leaders of unicorn companies to find out about the key issues, pain points and challenges that start-ups face and how they can address them with a strategic approach to marketing and communications. My name is Russell Goldsmith and my co-host for this series of interviews is Tyto’s founder, Brendon Craigie, and today we are thrilled to be joined online from California by Mark Lee, Founder and CEO of the remote access and remote support company Splashtop. Founded in 2006, Splashtop raised $65 million in new funding at the start of 2021, which pushed the company’s valuation to over $1 billion. Welcome to the show, Mark. Can we start by you just talking us through the origins of Splashtop? And it will also be good just to understand the relationship that you’ve got with your co-founders?
Mark: [00:00:56] Sure. Well, thanks for having me. Splashtop has a unique story, I believe to the extent that our co-founders, there are actually four of us and we’ve actually known each other since college days. We went to school together at MIT in Cambridge, Boston. It’s been a journey in the past thirty-seven years working closely together. This is actually our second start-up together. So, the whole Splashtop story. And we started while in school, we were in a competition, entrepreneur competitions. Our entrepreneur interest started when we were back at school, and it was used to be called 10K competition. I think the competition has expanded now it’s 100k, so the winner gets 100k now, back then 10k was bigger. So anyway, we did not win the competition, but we were runner up. After MIT we decided to go our separate ways, work at big companies because we want to build a safety net first. And also, some of us, of course, need to pay down our school debt. And our goal was to get back together after a few years of working and start something together. So, in 2000, we launched our first company together after six, seven years of working at big corporations. Our first start up was quite successful. I mean, we sold it to a public company after four years of working at it in 2004. It was in server management space. Today’s HP, Dell, IBM servers are still using our software from 20 some years ago. It’s an embedded data centre system management software. So, after that success, we decided to, in 2006, the company bought us, public company, we stay on for two years. There was a golden handcuff, and we were itching to start something new again. So, in 2006, we, the same team were still together, and we launch… actually, back then, the company was called DeviceVM and later on, switched to Splashtop.
Russell: [00:02:46] I was going to ask. Why change the name then? Where does that come from?
Mark: [00:02:50] So our first start up was in the server data center management and server market was about 10 million units a year. After the first start up, we started thinking, ‘Hey, you know, PC market is much bigger, it’s three four hundred million PCs a year. Why don’t we focus on the bigger volume market?’ Well, the biggest problem we saw back then was it was Windows XP days. So, if people can take back, Windows XP takes forever to boot up. The more software you install on it, there’s the concept ‘win rot’. It just takes longer and longer for Windows to boot up. Often, we turn on the power, go get a cup of coffee, and come back and hopefully Windows is up and running. And back then Internet was… people just wanted to get online very quickly. Check the weather, check some emails and then before they head off the road or something or get on other things they need to do. But PC just takes forever to boot up. And so, our thinking is, yeah, let’s give people an instant on browser OS and DeviceVM, VM stands for Virtual Machine that was the company name, and we created an instant on browser OS. This is all predating Google Chromebook. Today, people when they think about browser OS, they think about Chromebook. And actually, this is four years before Chromebook existed. We actually shipped on HP, Dell, Lenovo, Acer, ASUS… Back then there was a wave of netbook. We were the platform to enable the netbook, and we shipped on over two, three hundred million PC per year. Then the mobile wave came. And when the mobile wave came in late 2009: iPhone, iPads, etc, we knew our days would be challenged because a fast, full PC is not going to be comparable to a mobile device in terms of instant on, always on. And so, we knew we had to pivot. So, we decided, ‘Hey, DeviceVM, we need to pivot into the mobile space. How do we bridge between PC and mobile?’ And the product name was called Splashtop. So, we decided to just change our company name to the product name for consistency.
Brendon: [00:04:54] Great story and great to get all of that history. Looking at the market today, what distinguishes you from or sets you apart from competitors in your space?
Mark: [00:05:03] So when we move into Splashtop, we want a bridge between mobile devices and PC devices, and so remote access was the solution that we thought will be the killer app on the mobile side and that allows you to remote control and manage your PCs, too. So, we first launched our app on iPad, so it’s really that consumerisation usability that we focus on. And we actually were so successful on iPad App Store, we were even beating Angry Birds. So, if you look at, I guess, any chart or any chart back in 2010/11, we actually for many months, we were actually the number one selling app on iPad, beating every application, even games. Well, I think back then, a lot of people, when they first got their iPad, there were not that many applications on it too. So, the first thing they thought about is, ‘Oh, what if I can access my Windows or Mac applications and data that’s out there?’. So, we were the top selling app and that’s what we built our brand really, this whole consumerization and so ease of use and people love our product, the performance, we can stream even 3D games. So, people were even, ‘Oh, I don’t have World of Warcraft on my iPad, but look at this, I can stream my PC games’. So, when people post those type of video, it tends to be viral, and we get hundreds of thousands or millions of views. So very quickly we establish our brand in the consumer space. But then a lot of business users, actually turns out a lot of IT people and MSPs are gamers, too. So, they saw Splashtop, and they started thinking, ‘Oh, OK, well this is so much faster than what I use today at work’. Like a lot of them used LogMeIn, TeamViewer, other remote-control apps, but they don’t have this level of performance. But Splashtop was missing a few manageability features, and they want more to support customers. So, they contacted us. We listen to these IT and MSPs, and we added those features through the years. And now I would say ninety eight percent of our revenue is all B2B. We still generate a little revenue from consumer, but really business market is our key focus now. So, we do differentiate from performance, differentiate from ease of use. And I would say, you know, our pricing is very attractive compared to a lot of our competitors.
Brendon: [00:07:14] And it sounds like those consumer reach that you’ve got really have helped you to build the business into what it is today in terms of honing that consumer experience for the for the business user.
Mark: [00:07:26] Correct. Yeah, I mean, it’s this whole shadow IT wave, BYOD wave. All these really have helped us to expand into the market. But I guess ultimately also really listening to the customer. At the early days or even today, I get on all these discussion forums to help users because I want to know how people are using our product. I’m personally always involved trying to make sure our customers are happy too.
Brendon: [00:07:49] That’s great. And maybe on that note, Mark, what have you seen through the pandemic? Because I’m imagining a business like yours with your focus on remote computer access and so on, presumably, that’s had a big impact on your business.
Mark: [00:08:03] Yeah, the only silver lining in this whole pandemic is really our business really has grown a lot in the past year, just like people hear about Zoom and others because of the need for remote work, remote learning. I would say our business, we probably have shared that our business grew over 160% last year. It was strong demand from business. In the past a company might have only a few people needing remote access, but during a pandemic, everyone needs remote access. So, we have seen a lot of our customers expand the number of seats – we charge per seats. And that really has continued to propel our business. Schools have been coming to us to enable remote labs. We did a survey. Ninety some percent of the students really see hybrid learning as the future. And what our remote lab has enabled is many schools, they have physical labs that runs Adobe software, AutoCAD software, specialized software, and these require high end workstations. With our product, we can extend out all these software to students at home with any BYOD devices. Disney, a lot of animation companies, CBS, NBC, golf channels, etcetera are all customers during COVID, as they need to do remote video editing because we’re well known for full performance, so a lot of different studios, games studios, all came to us. And COVID research, a lot of medical equipment companies, they came to us as their doctors need to do research on Alzheimer’s and also COVID research, and they’ve been using our product to enable remote research. So, we feel very gratified that we’ve been very much helping out all these businesses and schools to be able to continue what they need to achieve in terms of their goals. So, it’s been a blessing.
Brendon: [00:09:53] It sounds like you’ve played a really critical role for a lot of organisations. I don’t know whether there’s anything that’s worth elaborating on in terms of thinking about the remote economy and how that’s becoming more and more important. Are there any key trends that you are seeing that are worth touching on?
Mark: [00:10:10] Yeah, definitely. During this whole digital transformation that Microsoft has talked about accelerated, compressed and cybersecurity becomes super critical. We saw the SolarWinds issues, the Kaseya issues, President came out with executive order that, ‘Hey, all federal government, etcetera, should look at segmenting network, ensuring you got a zero trust framework, right?’ So, Gartner also talk about zero trust, etcetera. And people do recognize that VPN is broken. Today’s VPNs, it’s based on 20, 30 years ago architecture, the hub spoke architecture when more and more workflow applications are moving to the cloud. Today we’re using Office 365, we’re using Salesforce, ServiceNow… More and more application workloads are in the cloud and our employees are everywhere. Our employee is no longer confined in the corporate network. So how do you define that corporate perimeter? So, the firewall was designed to assume everyone is working in the corporate network, in the data center, etcetera. So, I think the whole security architecture is being rethought and, during COVID, we’ve seen a lot of customers bypassing the VPN using Splashtop. It’s because the scalability, security challenges, etcetera, that people are facing. I think a lot of people are talking about this whole cybersecurity risk, it’s front and center for many business concerns. Ransomware is everywhere, and we are seeing a lot of opportunity to build a stronger, better solution to protect our users whatever they want to do remotely. Remote is a new norm.
Russell: [00:11:46] Mark, I mentioned at the top of the show you reached unicorn status at the start of the year. What would be good to know is how has that changed the perception of the business?
Mark: [00:11:54] Actually, two years ago or pre-COVID, I told the team we’re going to become a unicorn, and that’s our goal in two years. And the pandemic really accelerated it. We achieved it in one year. So obviously there was people are definitely ecstatic and proud that we’ve been able to do that. And at the same time, we were achieving it while helping the world address this whole pandemic challenge. So, it’s a proud moment for every one of us. But obviously, as a CEO, my challenge to the team is, ‘OK, well, we’ve reached our unicorn status. What’s our next big goal?’ So, it’s really part of that whole journey. We’ve been profitable for years since we pivoted the business from DeviceVM to Splashtop. We haven’t fundraised for over 10 years. We were bootstrapping after we had to pivot. And so, we bootstrapped to become profitable, cash flow positive. So, when we were doing the unicorn round, we were actually… in 2020 we were generating tens of millions of dollars already. We did not need to raise a round, but we did the round, primarily to elevate our brand because many people know about us, but they don’t know how big we are. And we wanted to begin to position ourselves towards IPO and we need to attract talent. So, in the past year since unicorn, we brought in CMO, we brought in head of sales, expanded our team significantly too. And we continue to generating millions of dollars cash flow per month. We still haven’t touched a single dollar of the money we raised. But obviously, it gives us this whole brand elevations and positioning and attracting talents. That’s really the main goal of the unicorn round.
Brendon: [00:13:31] That’s really interesting. And I think you might be the first CEO that we’ve interviewed that’s talked about the raising money really from a positioning perspective, but it makes a lot of sense. One of the areas that we really like to drill into is communications and culture within business. You obviously just touched a little bit on that. But what’s been your approach to raise awareness and differentiate yourselves in a very crowded marketplace?
Mark: [00:13:55] Well, in terms of the whole culture, because we have four co-founders who’ve been around for 30 years, we’re pretty much like a family. So, what really differentiates us from other companies that have come across is and companies we have worked for is I think we continue to have this great family caring culture. And because four of us behave in the same way more or less, I think this culture permeates across the company. We care about every employee and the employees care about the company and then in turn I believe they care about the customers. It feels like it’s a big company. Our team is very focused on customer success. We want our customer to be very successful. It’s been reflected in our NPS. Every time someone uses our product at the end of the product sessions, it will prompt a rating, right? I think we’ve seen that with several apps nowadays, but we were one of the very first to start doing that, too. So, we really care about ensuring that user experience is always top of our mind, and we have a very transparent culture, right? So as part of the style, how four of us operate, we share our financial information with every employee. Every employee is a shareholder. We want them to be successful financially when we succeed. Everyone knows how much revenue we generate per month at the end of the month, how much profit we generate end of the month, and we want to make it clear that everyone can make a difference. We try to hire the people that are good fit for the culture too. A lot of times, a lot of companies, when they try to accelerate their growth, they hire very fast and then they try to churn. We actually spend our time making sure it’s a good fit because we actually have been trying to slow down our hiring to make sure we have the right people joining us. And that’s actually more critical in our mind to preserve this culture. And having fun. Because for us, life is too short and all four of us are fun loving people and we enjoy the whole journey of learning. And we want to be sure that everyone have a great career goals, personal growth, financial success all together in this whole journey and while having fun together.
Russell: [00:16:05] I love that, yeah, as you said, everyone can share in that success, and that leads nicely onto the question I wanted to ask about internal communications because particularly over the last year, it’d be good to know how, you’ve talked about how much the company has grown as well, so how you’re navigating that need to communicate with individuals, with teams and then the whole company as well, particularly as I said, given everyone’s working remotely and they’re spread out, so wide across territories.
Mark: [00:16:33] Despite, we have remote work solutions, I would say, pre-COVID, actually, most of our employees are here in the Silicon Valley, so it’s been somewhat more a learning process for us as well. But fortunately, because we have good remote solutions, all of us was instantly ready to do, well to be remote work. And as we were growing, we actually started hiring people all over the U.S. We felt actually, our products work well to support remote work. So, our CMO actually is based in Denver, our Head of Sales is based in Texas. And we have employees in New York, we have employees in Georgia. So, we start hiring people all over the U.S. actually during the pandemic. And we put down all the tools needed, obviously, to support that, including Splashtop’s own – we eat our own dog food! And Microsoft Teams has been very, very helpful in terms of supporting ad hoc discussions. And because we have a very open, transparent culture, I’m constantly sending out updates with the team, constantly communicating. We have scheduled monthly town hall type meetings allowing employees to ask questions and discuss things that are on their mind. And we put together a remote work package too for employees because we recognize that not everyone has strong internet at home or subscribe to, so we have subsidy for that. Some people don’t have good monitor at home, we have subsidy for that. So, different things that we put together to make sure that, hey, everyone can be comfortably remote work during this whole process and putting all the tools. And I think it is part of that culture that we’re very open and transparent that really helps.
Brendon: [00:18:14] You’ve just spoken a lot about the internal side of communication. I’m just wondering in terms of the external side and you being the representative of the company as happens with the CEO, you’re part of a team and you’ve got three other co-founders, but often people look to the CEO as the external representative. I just wondered, like, how do you view that role and what have you learned along the way?
Mark: [00:18:38] It’s been a lot of good learning experience. OK, when I first started, it was more talking to venture capitalists, VCs, because you got to put together decks, convince people to put money in, writing the checks. So that’s always the number one challenge in starting a venture is, OK, doing presentations to the venture capitalists. And I think through the years, I got better and better at it. And obviously, if I look at myself, I always viewed myself as an introvert. So, it’s been a bit of learning. But on the other hand, if I compared to many MIT colleagues that I have seen, I’m actually an extrovert, so actually out of the four co-founder the reason I’m a CEO is actually I can communicate better and convince the venture capitalists better, etcetera, in this whole process. I would say it’s largely a learning process and it’s a forced function when you have to raise capital. But obviously, with a unicorn round, with preparation towards IPO, there’s a lot of more public learning that facing public analysts, etcetera, that we need to prepare towards.
Brendon: [00:19:47] I wouldn’t have guessed that you were an introvert, but have you had to formulate a plan to work on that communication side? Or did you just naturally find that that you were quite good at it?
Mark: [00:19:59] Well, I think my marketing team is putting together a media training plan for me, so I’m sure there’s always going to be a lot of things that I need to improve upon. And I think getting on the stage is a little bit different from on a Zoom call too, etcetera. So, I’m sure there’s going to be a lot of improvements. I look forward to. I think, in the podcast, obviously, people only hear audio, but there’s going to be a lot of gestures and projections of voices and I guess a combination of things that can make a more powerful speech.
Russell: [00:20:31] Very good. Mark, we’re sort of closing towards the… well coming towards the close of the podcast. There’s just a few more questions we wanted to ask you more sort of business in general. The first is, what initial decision is most vital to building a successful business? And you’ve done a few now!
Mark: [00:20:48] Yeah. No. Thank you. Yeah, so. It’s the team. Earlier, I mentioned we got four co-founders. It’s amazing, I guess people always are amazed that we’ve been still friends after 37 years. I mean, in business too, right? I think there’s always going to be a lot of disagreements when we discuss different business topics and different view of different priorities. And so, because the trust that we have built among us is unparalleled and we know one another strength and weakness so we can execute fast. We know that that’s a strength we got, I mean, there’s zero politics. It’s all very open communication. We know any disagreement is about the task. It’s not personal. And sometimes people might feel personal. But after a few drinks, we’re all good. Back to where we started, right? So, again, having fun. There’s a lot of off work gathering too as part of that whole culture and relationships. So, I think because it’s a long journey, there’s going to be a lot of ups and downs. I view building the right team is so critical in this whole process and even finding the right investor is part of that whole process too. It’s this team. Actually, most of our investors for this company was in our prior company. When we sold last company and ready to start a new company, two VCs that invested in our prior company came to me and say, ‘It doesn’t matter. You don’t need a business plan. Whatever you guys want to do; we’ll be funding it’. Right? They don’t even really care what ideas we will come up with. They just kind of felt, ‘Hey, you guys will figure it out and you will grow a business’. And so, it’s the trust and relationship, and this company’s gone through pivot. It’s been, you know, since 2006, fourteen years. A lot of VCs usually would have exited, tried to sell their position, etcetera. They’ll just stick with us despite the downs. And so, it’s been a great journey with a lot of great, supportive people. It’s really assembling the team, in my mind.
Russell: [00:22:49] But along that journey, there must have been some mistakes. So, what’s the biggest one you’ve made? How did you fix it? But also based on the relationship you’re saying you’ve got with your co-founders, if you or one of them has made a real major mistake, how has that impacted on that relationship?
Mark: [00:23:08] Well, we started as DeviceVM, I mentioned, we had to pivot and actually DeviceVM was very successful at its peak. We had three hundred some employees, so that was 2010. We were shipping on three hundred million netbook per year. I mean, with all these PC, OEM, netbook, notebooks, and PCs. But then as we had to pivot, our revenue was declining, we had to lay off people. As a CEO, I’m always optimistic just by nature of a start-up CEO, super optimistic, I felt I could drive new revenue and to compensate for the declining revenue from the old business very quickly. But it did not happen as quickly as I liked, and we end up having to let go of people through a process of a year and a half. We had to downsize from three hundred people to 60 people over a year and a half. And that was really, really painful because I was really optimistic that, hey, it’s a family, we don’t want to let go of these people, let’s figure a way out and to grow new business. But it did not come in as fast as to support such a big organisation and in retrospect, I think definitely would have been better if we cut harder and faster versus extending that drive. It was tough on our founders, too, because a lot of them need to be talking almost like to a family member that sorry, we just cannot, and for a year and a half solely letting go a different group of people. So, I wouldn’t say it’s a big mistake because it’s more a lesson learned, I guess. That was the biggest challenge I have faced in my career, essentially letting go of people you really trust and work together for years.
Brendon: [00:24:51] That must have been really tough. And thank you for sharing that. And maybe connected to that. I mean, I don’t know whether this was part of the same journey, but, what’s the biggest communications challenge you’ve ever faced along your journey? And how did you overcome it?
Mark: [00:25:08] Our communication has not been run into too many challenges, I would say, because we’ve been… well, I guess maybe we’ve just been very fortunate in terms of staying open, communicating with all employees. We’re very transparent, our pricing is super transparent to customers too, and they know what they’re getting into. We have a seven-day trial. Over half of our trial sales convert without us ever touching them. The product speaks for itself. We have transparent pricing. We have great customer support. So, we have not had to face too much, knock on wood, I guess, these communication challenges both externally and internally, I would say in the process, but we’re always, with a unicorn round, with our new CMO on board, marketing team in place, we’re making investments to really up level our branding, our communications, especially towards upmarket. So traditionally, while our sales motion is really inside sales, self-service, SMB, small business focus. But as we move upmarket, we see there’s going to be a lot more external communication that we need to do. And that’s actually why I’m here also for the podcast. We’re really trying to go out and talk to the world and tell our stories.
Russell: [00:26:26] It’s our pleasure to help as much as we can! Listen, Mark, we’ve got a final question that kind of leads nicely onto it, actually, because I’m just keen to understand what’s next like next six to 18 months. But also, beyond that, what legacy do you want to leave as a company?
Mark: [00:26:40] There are probably two main aspects. I think this whole remote work, remote learning is here to stay and the need for a secure remote access solution is super critical for our future economy, digital economy. How do we prevent all these cyberattacks effectively and with an ease-of-use product because security and simplicity always kind of go diagonal. It’s difficult to build a secure product that’s not complicated. It can get very complex, and we believe we want to play a critical role in that whole process to make us essentially deliver a much better user experience for a super secure product that requires huge dollar spending, etcetera. Complexity come with a lot of investments too. So that’s definitely one area that we believe want to make a better world for. Second, it’s really coming down to the people, our team that, in this whole process, we want to be sure everyone is growing more professionally as well as personally. And then at the end, as I mentioned, we believe everyone should enjoy the financial success together. And I wouldn’t want to call this a legacy. It’s just kind of who we are.
Russell: [00:27:56] That’s a great way to finish. Mark Lee, thank you so much for joining us. Really appreciate it.
Mark: [00:28:00] No, thank you. Appreciate the opportunity.
Russell: [00:28:05] I really enjoyed that, Brendon. What were your thoughts on what Mark had to say?
Brendon: [00:28:09] Well, yeah, really inspiring stories, and really felt like we got to go under the bonnet and understand the history of the company and the culture. So, I really enjoyed it. I thought a few things that jumped out to me because they resonated with me as a more modest CEO of a smaller enterprise, but were the importance of having the right team and having the right team from the beginning, because I remember when we started having a small group of founders, but they’re all still with the company. So that really resonated with me. And then the other thing that resonated with me was the point about all employees sharing in the company’s success. Again, that’s something that we’ve done, it’s we’ve made every employee a shareholder in the company, and I think it really helps because it allows you to get everyone on board and everyone really buys into what you’re doing if they feel like they’ve got a stake in the company. So, yeah, I really enjoyed that and those are just a couple of things that really shone out for me.
Russell: [00:29:05] Yep. Right place, right time or just foresight?
Brendon: [00:29:08] It’s really interesting, the whole pivoting thing in terms of, just how they developed a technology that well initially was used in netbooks, but then ultimately became the great basis on which to enable pro users and consumers to access things remotely. And then obviously, as we’ve seen within the world of technology, the consumerization of IT, it’s just seeing that focus on usability mean that things then really take off within a business environment. So, maybe, I think ultimately what they got right was focusing on the user and focusing on the user experience, and if you do that then you’re going to be destined for success.
Russell: [00:29:52] Well, that’s it for this latest episode in this special series with Tyto. If you want to find out more about Splashtop, then their website is simply splashtop.com. We’d love to hear your comments on today’s chat. You can share them on our Facebook, LinkedIn, Instagram, or Twitter feeds or in the comments of the YouTube version of this podcast. And those are all linked from the top of our website at csuitepodcast.com, where you’ll also find all our previous shows and supporting show notes, plus links to where you can follow us for automatic downloads of each episode via the likes of Spotify and Apple. And if you’ve liked what you’ve heard, please do give us a positive rating and review. We’re, of course, available on all podcast apps. Just search for the csuite podcast and hit follow or subscribe. You can also subscribe to the Without Borders podcast from our partners at Tyto. All the details for that are on their website. Just head to tytopr.com and click on the podcast link in the top nav bar. Plus, you can also download a copy of ‘Growing Without Borders, The Unicorn CEO Guide to Communication and Culture’ from Tyto’s website, too, which is a great overview of the first 15 of our unicorn interviews. If you are a unicorn leader yourself and you’d like to be part of this series, then please do get in touch via the contact form on the website at csuitepodcast.com. Plus, of course, anyone can get in touch too with any feedback you may have. And finally, you can also reach me via Twitter using @RussGoldsmith, or you can find me on LinkedIn. But for now, thanks for listening and goodbye.