Thought Leaders in Cyber Security: Mark Lee, CEO of Splashtop (Part 3)

Mark Lee: We are seeing an expansion of the market opportunities because of COVID. Traditionally, most businesses have been using VPN and RDP. VPN gives too many privileges to the end-user from home. Once you are connected to VPN, there is a lot of potential lateral movement from your home devices which could be infected with malware that will go across the corporate network.

Also, the performance is a big issue with VPN. Imagine that you are connected with a VPN and all of your home traffic is routing to your corporate network. Let’s say we are doing a Zoom meeting. All the video traffic is routing to your corporate network before it goes out to the internet.

It’s a big problem and a big challenge for corporate networks to be able to support so many people on Zoom calls. With Splashtop, your Zoom, Salesforce, and all the other sessions are not routed to your corporate network like a VPN would do. You are just launching the application on your home computer. It’s only when you are accessing corporate assets that you will be using Splashtop applications dedicated for that traffic. It makes it much easier for IT to monitor and secure the entire environment.

I wouldn’t say that we are ripping and replacing the VPN because VPN still has its value for many other usages. However, VPN was never designed for for remote access. It doesn’t scale well and has a lot of security challenges. The market is moving towards a different view of trust, a different ecosystem solution to address the shortcoming of today’s VPN solutions.

Sramana Mitra: How many customers do you have?

Mark Lee: Because we focus on SMB, we have $56 million in ARR. Most are small and medium businesses. Our ACV is low. It is usually $500 to $1,000 for remote access. We do have over 200,000 users on our platform. It is a high volume, low ACV.

Sramana Mitra: How do you sell these? Is it completely a self-service sale or do you have to do tele sales to sell this product? 

Mark Lee: It’s heavily inside and inbound sales right now. Our team engages people in chat sessions, emails, and phone calls. Over 50% who try our product end up buying it. That is super-efficient. We are unique, typically a lot of companies lose a lot of money as they grow.

Last year, we generated $26 million in cash. Sales were $56 million, so that’s almost 56% in margin cash. We don’t need to build big enterprise sales teams because we are not focused on the enterprise market today. It’s mostly inbound and it’s highly efficient.

We have built an outbound sales team primarily focusing on colleges because the deal size for colleges is much higher. It’s usually $10,000 higher. Since we closed over 250 schools in the past six months, we see a lot of expansion opportunities. Usually, it is one department that is using our product.

For example, the architecture department is using our product, we want to expand our products to their design school, medical school, law school, and every department. Every department has its own labs needing students to access remotely. We are looking to expand in a big way. Calling out makes sense when the deal size does get above $6000 ACV. 

This segment is part 3 in the series : Thought Leaders in Cyber Security: Mark Lee, CEO of Splashtop
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