Bootstrapping an AI-Powered Security Startup to $10M+ in Revenue: Osprey Security CEO Rohit Anabheri (Part 4)

Sramana Mitra: These two customers that you were able to place the MVPs into pilots with, how long did it take you to turn them into paying customers?

Rohit Anabheri: About three to six months. They wanted to ensure the stability of the platform.

Sramana Mitra: What is the average deal size?

Rohit Anabheri: Six figures.

Sramana Mitra: Each of the enterprise deals were in the six figures.

Rohit Anabheri: Mid six figures.

Sramana Mitra: So in 2017, you have two enterprise customers that are paying.

Rohit Anabheri: Yes.

Sramana Mitra: Did you add other customers?

Rohit Anabheri: Absolutely. We started building an AI and ML-driven platform that augments the current platform.

Sramana Mitra: In 2017?

Rohit Anabheri: Yes. We were pumping the capex dollars in building the second platform. While we were doing the penetration of the market with our first product, we also were smart enough to look at a path forward. We wanted to build a platform where we can be an aggregator in terms of taking multiple products on board.

Sramana Mitra: The first product is a data discovery product.

Rohit Anabheri: And compliance.

Sramana Mitra: The second, did the problem come out of the customers of the first product?

Rohit Anabheri: Yes. Once you discover the data, you need to protect the data. IPDRR – identify, protect, detect, respond, and recover. Identity has been done by the first one. So protect the identified data, detect if there are any threats, respond if needed, and recover if lost. These have not been addressed in our first product. We wanted to cover all five of them. The next journey was to be able to protect, detect, respond, and recover.

Sramana Mitra: While you were selling the first product, at what point does the second product development cycle begin? In 2016, you started the company. In about 11 months, you have an MVP and two paying customers.

Rohit Anabheri: At the eight month, we started dabbling into the PDRR space.

Sramana Mitra: So this is one platform. You’re fleshing out the different parts of the platform as you’re going along.

Rohit Anabheri: We had the vision. Once we validated and had a paying customer to do this, we started looking at building the second platform.

Sramana Mitra: What is happening with the first product that is in the market at this point? How many customers and what kind of revenue?

Rohit Anabheri: We were able to gain about seven customers in the next year. Then there was an exponential demand to protect data.

Sramana Mitra: So there was a natural upsell.

Rohit Anabheri: Exactly.

Sramana Mitra: So the deal size went up.

Rohit Anabheri: Exactly. We also got a lot of traction from the VCs at this time. We’re talking about 2017 to 2018. In this space, Cisco was acquiring cybersecurity companies. They were investing about $3 billion just to acquire companies. I was getting emails. I’m still getting emails today every week.

Sramana Mitra: Successful bootstrappers always get interest from VCs.

Rohit Anabheri: We were going out to wine and dine just to understand the parts. We wanted to know why they’re interested in us.

Sramana Mitra: I’ll tell you why. Talk to me about what you were doing by applying machine learning to your problem domain. This is the time when AI is starting to hit the mainstream. Cybersecurity is seeing a lot of influx of AI.

Rohit Anabheri: All the sensitive data is not in some file. It’s in our Word file or Excel file. The biggest thing that we leveraged AI and ML is in understanding how the Snowden attack happened. He took the sensitive files and changed the file into some gibberish filetype and got it out. It doesn’t matter if you change the file type. We were able to use AI and ML to read about 45 to 50 file types.

Let’s say that you took a picture of your license or blood work. You may have some Excel file about your family trip. The data is in different file types. We leverage AI and ML. We’re the first of our kind to extract that data and mine that data. We were able to train the machine. We were able to educate the machine to make it smarter and try to protect those.

Sramana Mitra: Interesting. What did you do with the interest from the VCs? Did you take venture capital?

Rohit Anabheri: No. We have a bigger vision. We have been validated. We know exactly where we are. We were close to accepting a deal but decided not to go in.

Sramana Mitra: How far along are you?

Rohit Anabheri: Eight figures. Mid eight figures. We’re planning to scale it up further.

Sramana Mitra: Congratulations! Thank you for your time.

This segment is part 4 in the series : Bootstrapping an AI-Powered Security Startup to $10M+ in Revenue: Osprey Security CEO Rohit Anabheri
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