The DTC Enterprise Tech Podcast

Geeta Schmidt (00:00):
From the early days from Humio, we wanted to be able to get Humio and the products that we were building out to the world as fast as possible. And on the very early discussions with George and the team at CrowdStrike, it was clear that that was what this relationship was going to help us do. And again, the fantastic ability and success of the CrowdStrike organization and team, it was pretty clear that this was like a rocket that you needed to jump on to get there.

Ronda Scott (00:30):
Welcome to the DTC podcast, a series of conversations between the investors and operators at Dell Technologies Capital and the people who are building what's next in enterprise technologies. In this exit interview episode DTC, managing director Deepak Jeevankumar talks with Geeta Schmidt, co-founder and CEO of Humio, a company that was acquired by CrowdStrike in 2021. They talk about what Geeta and the founding team set out to accomplish with Humio, how they accidentally became a cybersecurity company, and the experience of being acquired by a rocket ship company like CrowdStrike.

Deepak Jeevankumar (01:05):
Gha, welcome to the DTC podcast series titled Exit Interview. It's great to have you as our honored guest. It's great working with you when you were the CEO of EO when I was on the board. Thank you.

Geeta Schmidt (01:18):
Thanks for the invitation. I'm looking forward to it.

Deepak Jeevankumar (01:21):
Great. So why don't we get started by talking about how did the company Mio come about? How did the founding team come together? What does the name EO stand for and what was your world domination plan when it got started?

Geeta Schmidt (01:35):
Yeah, that was a lot of questions in one. I think we really started with the simple idea of really building something for ourselves. And I think oftentimes I see when good startups come about, they actually come from some type of pain that they felt themselves and wanting to change the world with either a new service or a new product or new technology. And we really wanted to bring a new product to deal with all of the logs that people have been dealing with. A lot of log data that we were running in our jobs ourselves in trying to understand and get insights for development environments and security environments. And through that expertise we realized none of the tools really worked as well as we'd like them to. So when that happens, you really start to get creative as to what you'd like to see in a product.
(02:26):
And I think that's really where the synergy came about when we started looking at competitive products in the market and realized nothing really was fast enough to manage the amount of data that we wanted to manage and didn't give us the results in real-time. And I think in many of these critical environments and scenarios where it's DevOps, SRE land, or security, time is of the essence. So we just really started on a mission to build this from the ground up and build it based on new technologies, which some of our competitors hadn't really taken into account. So we started just building a new product to take over the world, very naively, I would say, we felt the pain, we thought we could build something better, and we started to do so, and we started to really realize how powerful something like this could be and we started telling others about it.
(03:23):
And then when you realize that we weren't the only ones running into extremely high logging bills or the inability to log all the data you wanted or really struggling with getting to the insights that you need in a timely fashion, all of those things weren't just our problem, there were others that were running it. And that really gave us the energy to build LIO and build the product and get it out to market. So the validation very early on was incredibly important to us. Humio has a interesting name, I guess when you asked about the name. Humio is essentially putting two things together, the Humioan hu, HU part Humioan, and then the io, which is more of the technical side of things, the Humioan and the machine kind of coming together. And this was sort of our way of thinking of how do we bring Humioans back to really understanding how these machines are working.
(04:22):
In the old days, you'd have your computer, and you'd be building an application, and you could actually see that you could actually feel the machine, or you could actually get a sense of whether it is working. Are there things wrong with the product or the application? And suddenly, with cloud and with the way that we're running very distributed computing environments, microservices, very sophisticated security landscapes that we have to manage, everything is just very, very far away or almost you can't touch it anymore. So we wanted to bring this Humioan sense back to the machine. So it is a bit of a play on words I would say. And we came up with the owl as well in terms of just a fun idea of trying to build something that had a face and a recognizable kind of identity in an animal that's got really big eyes that's observing all the time. So yeah. So those chickens,

Deepak Jeevankumar (05:19):
That's a fun story. So how did the founding team come together? What's the story behind that?

Geeta Schmidt (05:25):
Yeah, we have all worked together. So Creston, Christian, and I kind of started in the early days and then we had the addition of Morton Graham, who also helped us on all the commercial side. We met in a earlier company called Tri Fork, and it was mainly consulting work that we were doing. So, I think this whole understanding of customers and consulting projects versus products was where we met. So we really all had this very keen sense of making sure customers were happy at the end of the day. And I think that energy that came from our founding team really built a lot of the structure or the values that we actually adopted when we built Humio, when we became bigger, et cetera. So, these customers in our DNA were very much part of our learnings from being in a consulting organization. We met, and we have very different backgrounds.
(06:21):
And I think these days when I actually talked to younger startups, I think that is something that I actually helped very dear that we had a founding team with very different backgrounds and very clear roles I would say. So my side was very much a commercial side. My two technical founders were very much on two sides of the technical pillars. One was costume was very much looking at the future and enhancements and also kind of very keen on being the person out there with customers. And Christian was really the one who was helping to run our architecture, our day-to-day, what we needed to build, fix, think about where the product was going. And then a commercial lead in Morton, which really came with a strong enterprise sales background and putting all of that together. We really had a set of experts all of a sudden. And I think oftentimes with a startup, it's really, really hard to do everything. And very rarely have I seen sole CEOs be able to do this well. And I think that that's something that I think is really important, maybe very unique to Humio, but I think other companies do this. It's just that I think we were lucky to have that early.

Deepak Jeevankumar (07:46):
That's amazing. And when did you know that technology was something very unique and world-changing? Was there a particular moment or KPI you were looking for when you were like, okay, you know what, this is something unique.

Geeta Schmidt (08:03):
I don't really believe in KPIs in that sense. I don't think KPIs are going to show you what the value your product actually delivers to an end user or a customer. A KPI is usually after the fact. It's more so like, okay, you've hit your number or milestone that you're tracking. I think that if you're an entrepreneur or you're building a product, it's like you're on the right track. You can feel it, you can feel it instinctually. I knew when we were on the right track, when customers were willing to bet on our product bet on the fact that maybe we hadn't built everything out that they need or want, but they were ready to put the investment and the time and the interest in helping us. And so we really had a design a lot of times design win customers in our early days that really helped us build our products, set our features, our focused help drive the focus of our teams.
(09:07):
And that feeling is very, very valuable, but it is also very fulfilling. So it's fulfilling not only for your commercial side, but it's also fulfilling for the team that's building the product at the end of the day. So I would say KPI doesn't cut it, or a number oftentimes doesn't cut it when your customer calls you back and says, you know what? You saved my day yesterday, or I could go home and spend time with my child because I know that we've got this covered now. And these are things that are also almost invaluable for the customer. And if you can get to that point with your product, then I think that's a home run. And when you feel that over and over again, then you start to feel like, okay, there is a direction here. And the confidence comes with that.

Deepak Jeevankumar (09:55):
Yeah, yeah. And I'm sure each and every one of those early partners and design customers were a great win for you. But is there one that you were particularly proud of?

Geeta Schmidt (10:05):
I think in the early days, Bloomberg was probably one that we were very proud of, partially because we really enjoyed working with 'em. It was also one of our first marquee customers in the United States, given we started, I'm American, but the team essentially early teams, all Danish. So we've got a customer that's over the Atlantic, very large, very recognizable in terms of a financial service versus company in the United States. And we were able to pull something together and give them a solution and a platform for their development organization. And we were incredibly proud. It was a very proud moment for our team when we were able to deliver that and they were able to go live with Humio. And those are things that I remember from oftentimes you think about later on, you get other deals and they happen, but the early deals really do make such an impact to the team, then you can do the next one, right?

Deepak Jeevankumar (11:06):
Yeah, exactly. Exactly. One of the unique things I remember when we started talking late in 2019 about partnering on a series B investment was that you had quite a few cybersecurity customers and use cases, although you never intended to sell to cybersecurity users to begin with. And it just so happened, how did that come about? How did Humio me, or the logging company, become Humio, the cybersecurity company, eventually?

Geeta Schmidt (11:41):
Yeah, that's a very good question. I think early on, interestingly enough, our customers recognized the value of what Humio could do for security and for large security environment. So we did not understand enough about these environments. Most of our background and our use cases were more on the developer side or DevOps side. So we really spent a lot of time with the customers in security early to understand what it is that they could get from Humio and what we could improve upon. And that innovative sort of almost taking it as a science project, I would say, saying like, okay, we do not know what this use case is, but we're going to, gosh darn it, understand what is required here. And at the time, we didn't really have security expertise. I think when we met, you were always a bit surprised that we were in some fairly large security use cases and customers without having really strong cybersecurity, let's say background or reputation.
(12:51):
I often find that we're solving a problem at the end of the day. And if we're able to solve a problem for a particular user better than, let's say, our competition can, whether they're cybersecurity users or whether they are developers in general, our user was fairly technical. So I think in some senses there's that, that's the same. The pivot really started when more and more of these security customers started really coming to us and we really saw this change that where we needed to really turn and start to focus on the segment, find more expertise, work with someone like yourself, deep book that has a ton of expertise and understanding of the market. And that was very valuable for us at that point in time because when you came on board, we didn't really, you did open a lot of doors where we had conversations with individuals to really understand what is top of mind for CISOs, what is top of mind for security teams in large organizations, which for us was, I would say we took much more of a grassroots coming up from practitioners and operators versus the top down. So that was definitely helpful from our relationship with Dell.

Deepak Jeevankumar (14:17):
Thank you very much. And so talking about that relationship we invested and in one year you get acquired by CrowdStrike. It was probably my shortest tenure on any board. So that was good in so many ways.

Geeta Schmidt (14:32):
We never actually had a physical face-to-face board beat it because it was Corona.

Deepak Jeevankumar (14:38):
That's right. That is right. We never had a face-to-face board meeting. So to the extent you can talk about it. So how did this happen? One year after series B was closed, you were acquired, and the acquisition was closed within a year. Well

Geeta Schmidt (14:57):
Look at how well you got us to pivot into security, but I guess it isn't. We did have quite a few security customers by the time we started working together. We also had joint customers with CrowdStrike. So in those particular scenarios, I think we were taking large volumes of endpoint data into Humio. So they actually seeing it in customers where they're curious. And I think what happened was there were a number of customers where CrowdStrike was coming more and more up as, let's work together, let's have Humio work together as a partnership. So we did have partnership conversations as many companies do in terms of integrations early on. But it wasn't until the latter half of the year where we started getting into pretty serious conversations. And I think it is also a bit of a landscape discussion on the horizon. There were a number of new products coming to market in the space, with XDR coming more and more from the segment and from Palo Alto and others that are coming up with these solutions.
(16:11):
So for CrowdStrike in particular, there was an interest to have a solution like ours in their portfolio to be able to expand the stack and their ability to provide a data layer, essentially a data storage layer for their customers. Up until then, customers needed to work with another vendor to let's say, store retain or use a logging solution of any kind. It's a massive opportunity. It still is. I mean, I think this is one of the best kind of stories when you talk about exits. When we started talking, it just sort of made sense. It made a huge amount of sense. So we started talking about our join customers. We started talking about where the complimentary technology and platform plays are here and where we could really grow the existing business. And from the early days from Humio, we wanted to be able to get Humio and the products that we were building out to the world as fast as possible.
(17:16):
And on the very early discussions with George and the team at CrowdStrike, it was clear that that was what this relationship was going to help us do. And again, the fantastic and very amazing ability and success of the CrowdStrike organization and team, it was pretty clear that this was a rocket that you needed to jump on to get there. It's always a funny story because I think every exit or acquisition has its own reasons. Why did this happen? I think for us, we actually had other offers but said no to them. And George was able and team there was able to convince us that it was the right choice.

Deepak Jeevankumar (18:01):
Yeah, no, I think CrowdStrike an amazing company and they built a great brand name and great trust with customers. So glad that worked out well. And how did you pick CrowdStrike, you as an Humio? What was the main reason?

Geeta Schmidt (18:19):
I think the main reason was, number one, the keen interest from the executive team. I think the tenacity of the team, I think the first call that I had was with George Kurtz was the day before Thanksgiving where he'd set up a very quick call. We had a very quick chat. It was a preliminary chat, nothing serious, but he was very keen on having the next discussion. And I said, well, it's Thanksgiving. Okay, let's set something up. Great. Maybe something will happen or not. And we were not in a position where we needed to sell or we had any reason to exit at the time. So for me, it was more like, okay, if he responds, we'll have the conversation. So it's the day before Thanksgiving, the day after Thanksgiving, George got the entire executive team on his side and set up a four-hour meeting with us to go through everything that we could go through in that period of time to get an overview.
(19:24):
And it was pretty much like that the whole time. So we had, I would say, in terms of the timeline and the intensity and focus to get this done, that was very impressive and also easy in terms of conversations. I think we also learned more and more about each other's companies. And it is very different when you're working with an entrepreneur who is interested in acquiring a company versus a large m and a team that's looking at that. And we really like the idea of working for someone who started his own company. It's a very different if it's a different place.

Deepak Jeevankumar (20:00):
Yeah. So post m and a, how was the experience of announcing this to the world and more important to your own employees? How did they react?

Geeta Schmidt (20:11):
Well, I have to say, if anyone has gone through this whole process because many things can go wrong, you can start this. And what doesn't happen is you've also seen with some recent large startups that haven't actually followed through on their acquisitions, but you have to just keep a face that you're just running business day in and day out, just as if the day is the same. And then also at the same time, run a parallel discussion around the possible acquisition. So CrowdStrike is also public, so there's not a lot of people that know that this is happening. So it feels very much like a shock when you kind of announced something like this. I would say it was also surprising on both sides. So surprising or new for CrowdStrike, this is something that they hadn't been expecting or heard of or known much about.
(21:10):
And then the same on our side. So for our side, I would say that it is exciting, but there are many, many questions for a team. And when you've started a startup, and you've gotten people to leave their maybe cushy jobs to join a startup and work really crazy hours and live the dream, and then it sort of is announced that the acquisition has happened, it's a wake up to say, okay, wait, this is a completely different place. What is this? Do I fit in here? And those are real, real questions. And I think part of our job was meaning the executive team at CrowdStrike and our executive team, was to make sure that we could make that transition as smooth as possible. So when we did get acquired, we were essentially working as our own unit under George, and so we had the ability to keep moving as we were.
(22:11):
There was no interest in slowing things down and spending a whole heck of a lot of time taking the team apart and moving them all around, which I think really, really I appreciated. I think the teams appreciated. There's an amount of time to just understand each other again. And also the majority of our company is not cybersecurity individuals again. So coming into cybersecurity and that industry pretty well, of course, CrowdStrike being one of the leading cybersecurity companies, if not the leading company in cybersecurity these days, it was a big change. We have to get used to new email systems and new security requirements, et cetera. That takes some learning, I would say.

Deepak Jeevankumar (22:58):
So may I ask you this? So what did you personally learn the most from CrowdStrike? What was your biggest learning experience at CrowdStrike?

Geeta Schmidt (23:08):
Yeah, I think I learned a lot about what and how a company scales at an incredibly fast pace. So I think CrowdStrike is still a very young company. And so in that sense, the amount of growth and the ability to, let's say, be all over the world and have these very, very large Fortune 100 customers, the way that the company has scaled the sales organization, the way that the product is scaled to fulfill, let's say much more than, and adding to the portfolio. And I think they were just very, very focused on execution, which I think at the end of the day, that is their competitive advantage, is to be able to execute faster. And oftentimes, I think there's a lot of companies that talk about very grandiose strategies or visions, but are unable to, let's say, get the ball over the line. I think that there is an intensity at CrowdStrike to get the ball over the line, and I think that's what helps them win. And I think that was something that I didn't really understand in terms of the scale that CrowdStrike was, or we had some growing up that we had to do. I mean, these are many more customers. We were handling a very large cloud infrastructure that we run at CrowdStrike. I mean, everything was just kind of thousand or hundreds of thousands times bigger than what we were running. So I suppose it was growing up very quickly.

Deepak Jeevankumar (24:53):
Yeah, no, I'm sure it was an amazing learning experience. So what is next for you, Geeta? How are you spending time both CrowdStrike?

Geeta Schmidt (25:03):
So yeah, I really enjoyed my time at CrowdStrike. I think one of the wonderful things that has happened for our team is that our technology has really become a pillar in the portfolio and the product. So I'm very proud of that. I'm very proud that it was what we wanted or what we were hoping for from the early conversations. So, with that said, probably a year ago, I started looking at, okay, it's probably time to move on and do something else. And now I'm interested in starting back to those early days. So right now, I'm working with early-stage startups, advising and investing and helping here in Europe because one of the things is I find Scandinavian companies really interesting. Humio started in Scandinavian, in Denmark, and I think there's a wonderful combination if we can put together sort of this teamwork and the ingenuity and creativity of what comes out of many Scandinavian companies and also help to get them over to this international Silicon Valley way of thinking. And we can combine this sort of focused business mentality with Scandinavian management and Scandinavian teamwork. It's a really compelling and enjoyable kind of journey. So I'm working with a couple of companies on that investing and enjoying that.

Deepak Jeevankumar (26:40):
Yeah. So how are you putting into practice what you've learned as the founder yourself and CEO? What are the top things you look for when you look at founding teams today?

Geeta Schmidt (26:55):
One of the hardest things is to, and it's very hard to gauge, is how much can the team handle. I find that in the early days, you have a lot of dreams. You've got probably a great idea and a great product, and you think you're going to change the world, but unfortunately, the world sometimes doesn't feel the same. So it just starts being difficult and can you handle the grit? It's basically getting back up and doing it again. So I look for that. I look for, as I talked about, these teams that come together. I like to see diverse teams, whether it's diverse backgrounds or diverse perspectives, because that actually ends up being the start of building a very diverse company in terms of thinking. So I really like to see that. I also love to see this obsession around customers. I really like when founders are just really, really doing as much as they can to get that extra stickiness or the extra put the extra mile in. And I look basically for teams that were like us. So that's probably to explain, but you can see it. I can usually feel it.

Deepak Jeevankumar (28:17):
Yeah. How do you draw a balance between founders who are obsessed on technology and founders who are obsessed with customers? What is more important in your perspective, from your perspective?

Geeta Schmidt (28:33):
I think you need both. There's not one or the other really. I think there's founders that need to realize both are important. So the technology side, I think right now there are a lot of companies, for example, building new AI companies, et cetera, that are looking at a market segment and trying to make the solution. I find in those scenarios, if there isn't a customer obsession, that it becomes too much of a technology play and may not actually be a commercial success. You can also have very technical founders who do have a customer driven approach. It just may seem like they're doing something that's very different or outside of their comfort zone. But I just love when that happens. I love when technologists go and try to be customer facing and try that because they don't have to do it oftentimes alone. And you can hire help and get people that are really good at it, but it's okay to be out of your comfort zone.
(29:38):
Ideally, you are out of your comfort zone if starting a startup. And also on the commercial side, there are a lot of folks that would just like to sell things that are ready. Usually not the case with early companies. So you need to be more creative. You need to understand what is the product today and what will it be in the next few months, and be able to understand how to articulate what the value of that is. So I would say it's not an either-or. There isn't like a founder that's going, and if they are only singularly technology-focused or sales-focused, oftentimes it ends up being, it catches up. Something catches up there, right? And you trip. Yeah.

Deepak Jeevankumar (30:24):
No, no, that is very insightful. Thank you, Geeta, it's been a pleasure hearing your perspectives and sharing your next phase of advising and investing in startups.

Geeta Schmidt (30:36):
And I want to say thanks. I mean, I think this is a topic that isn't often covered. So there's a number of us that have, let's say, exited and been really happy about how that's gone and want to share this with others. So I'm glad you've put a podcast around it. It's very useful, I think, for founders.

Deepak Jeevankumar (30:57):
Thank you very much, and thank you for joining us.

Ronda Scott (30:59):
Thanks for listening to the DTC podcast. If you like what you heard, you know what to do, like, share and subscribe wherever you get your podcasts.