SaaS Interviews with CEOs, Startups, Founders
1513 KeeperSecurity is Profitable, Churning 8-10% of Revenue Annually
15 Sep 2019
Chapter 1: What is Keeper Security and what services do they offer?
Launched back in 2011 after an 11-year hiatus in the tech industry. He's back in it now. He's got about 15 million users on his product. He's got thousands of logos using it. 80% of the revenue coming from what he defines as SMBs, less than 1,000 employees on those teams. They charge $30 per year for the platform. They churn about 8% to 10% of their revenue each year.
So healthy economics there as I look to scale with our team of 140 folks. Hello, everyone. My guest today is Darren Guccione. He is the CEO and co-founder of Keeper Security, the creator of Keeper, the world's most popular password manager and secure digital vault and Keeper Chat, the world's most secure messaging app for all your devices.
The software is used globally by millions of people and thousands of businesses. All right, Darren, are you ready to take us to the top? Yes, I am. All right. Popular is a big word, and my audience expects me to ask about it. So when you use the word popular, defend that. Why are you the most popular? Well, we have millions of users in over a hundred countries. So we, you know, we grow rapidly.
We thousands of users a day are being added to the platform globally. It's fantastic. Okay. So like, I mean, do you know for sure you have more users or customers in like a last pass or other people in your space? We don't really compare to others, but I can say we have, you know, millions. We don't really know what, you know, other privately held companies have or don't have.
But we know we have. And so in order to be popular, you have to be higher than somebody else. Right. So that's why I ask the question more. Define your market for me. Right. That's really what I'm asking is define your market. Sure. So we sell to individuals and businesses. We've got over 15 million people globally using our application.
We have, you know, thousands of companies using our product. We began selling the business product about two years ago and have amassed, you know, thousands, just several thousand over the past couple of years. We're traditionally private, so we don't typically disclose the exact number that we have. But I will tell you that based on what we see in terms of app store data and app store reviews.
We have really the highest level of customer satisfaction, highest consumer ratings. In iOS, for example, we're a 4.9 out of 5, which is very rare for a security application.
And we really let the customers, you know, speak on our behalf in terms of how they evangelize the product and speak about, you know, their satisfaction and compliance with the product in terms of having, you know, safeguard their most sensitive digital information. So Darren, who is actually paying you?
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Chapter 2: How does Keeper Security define its target market?
Is it a company and then they force all their employees to use you? Or does one employee start paying you and before you know it, the whole company is using you? Well, on the consumer side, you know, we sell to individuals at app stores through the website as well. But So we have individuals paying us just for their personal lives.
And then we have employees that pay us and also expense it through their company. And third, we have the actual company that buys it for the benefit of their employees. So it can take its form in different ways. There's a multitude of ways to access the product. So you can buy it for yourself or the company can purchase it for you.
Or like I said, we see employees purchase it because their company doesn't really sponsor it. Sometimes they'll just pay for it themselves or they'll expense you know, that through a report and send it to the company for reimbursement. Okay.
Well, just for the sake of really understanding what you do, let's just stay then at the actual individual user level and, and just, I will understand that that user can be by themselves, part of a team or part of a team where this, the company actually sponsors it, but we'll just talk at that level for the interview for just so everyone can understand.
So if, if someone listening right now wants this product and goes to the app store, what are they going to pay to download it from Apple or Android or wherever you're at? So $30 per, year and it covers unlimited devices. Okay. Got it. 30 bucks per year, unlimited devices.
And then I assume if you'd have a sales process where you're selling directly to companies, if they buy, you know, a thousand seats, you'll maybe obviously wiggle down on that $30 price point for volume discounts. Yeah. So we'll start at 30 for, you know, really SMBs.
And then if you need more advanced provisioning tools, you know, things like active directory, more sophisticated architectures, we'll pay $45 per user per year. can escalate. We also sell a family plan. We sell add-ons like secure digital file storage or something new called Breach Watch, which is a fantastic solution that protects you from the dark web.
And then we also sell things like, you know, I mentioned secure digital file storage, and then we have something called Keeper Chat, which is an encrypted messaging application. So it starts with password management, and then we layer in additional security solutions that are all really focused around preventing a data breach. Yep.
And do those additional, obviously product lines allow you to drive revenue from 30 bucks a year to 35 to 40 to 50 over time? Yeah. So we, you know, typically people start at $30 and then they start adding to the solution so they can layer in additional services that they find a benefit to them. But we try to really price it value so that the product is highly affordable.
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Chapter 3: What pricing model does Keeper Security use for its products?
When you say bottom up, can you please explain? Sure, bottom up means one of the people on the IoT team installed you when they were on vacation with their family one day. They went back and told their boss, we all need to use this. And then before you know it, you're moving to a thousand person plan. It's been both. So we see upstream deals like that.
individual user who used this for you know three years decides to go to his company and say wow we should really consider this for the entire organization we also market that way you know more of an upstream approach which we call grassroots so we'll market to the existing individual user base and then additionally you know we'll do a lot of you know digital marketing
We have a lot of inbound lead gen that comes in where people have never used the application. So we see both and we handle it that way. And then last question here. So you said, and correct me if this is wrong, you said at the top of the show, you have about 15 million total free and paid users on the account, on the platform? Yes. Okay. And of those 15 million? Over that, yeah.
Okay, over 15 million. Of those 15 or over those 15 million, how many are actually on a paid plan? Yeah, we don't disclose that to the public. Are you generally, you know, others have disclosed it, so I know kind of what's average. Would you say you're generally above average? Would you say you're generally above average or below average? We're leading.
Yeah, but see, you can't know if you're leading or not. Yeah, I do know. How do you know? Well, I know because I know what the metrics are with the other businesses, but that doesn't mean that I... How many paying customers does LastPass have? Why do you want me to disclose that? Well, I have them on. I know the number.
The only way that you would know if you're leading is if you know... Yeah, I'm not going to look. I'm not going to get into a debate with you about it. I'm not going to disclose it to you. No, no, Darren, I don't want... Just to be clear, I'm not pushing you to disclose. But when someone comes on... No, but you are. No, no, don't... Okay, I'm telling you now, don't disclose.
But what I'm going to say is you can't come on and say you're the best or have the top when you don't know what everyone... I'm not saying I'm the best. You just said you're the top. You said most popular. I'm not saying I'm the best. I'm not saying I'm the best. I can say... You can go to the app store and look at our rating and you can compare our rating with one of the other competitors.
More than welcome to do that.
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Chapter 4: What are the unique selling points of Keeper Security's offerings?
Okay, but that's different. Saying you have the best rating is saying your rating is the highest is very different than saying you have the most users or the most paying customers. I don't know what you're asking me. You said you asked me if we're the best. I'm just giving you a metric. No, no, I'm, I'm, I'm asking questions based off what you tell me.
And what you said was, but you asked me, you asked me how many paid users do we have? And you said, no. And I moved on. I'm saying we don't disclose that. And then what did you say right after that? I have no idea. I don't, I don't know. You said answering your questions. No, no, I'm going off what you tell me, Darren. And what you said right after that was you're at the top.
You said, you know, you're the best. And I said, how do you know that what's last past customer count? And you said, well, I'm not telling you that I know what they are. And the only way you know, if you're at the top or the best on that metric is if you knew those data.
So what I can say, and I don't know this, they're on my phone in front of me, but what you're saying is you have the highest rating on all these platforms where people can download. Is that accurate? That I've seen. I mean, it's a, it's a, it's, it's highly rated. It's 4.9 out of five. I think that's pretty high. If you look at, go to the app store and just pull it up yourself.
Look at our ranking versus the other products. I mean, I'm not here to like bash. I'm just here to answer questions. No, no, Darren. I like, I like data. Not, not, not when you say things like popular or top or best or most downloaded. I like data. There's no antidotes, but you have to understand something. We're privately held. We're somewhat guarded in the terms of the data.
You've asked me about compensation. You asked me how I pay my employees. You've asked me how many customers we have. You asked me how much, you know, how many are paid. I didn't realize that the interview was going to be, you know, a data harvesting session on our company. Darren, have you listened to any other episodes? I have not. Okay, so that's your fault, right?
Because we've done 3,000 interviews. So we've done 3,000 interviews. No, no, my point is I'm going to be respectful of data points that you say you don't want to share. I'm not pushing you on customer count. I asked, you said no, and I moved on. Thank you. But but when you but then when you use verbs and adjectives like top best or most popular, I'm going to quantify those.
I can't let you just run away with that without understanding what you mean. So what I'm saying, what I'm hearing you say, I make sure I get this right, is you are the highest ranked on the on these these downloaded platforms. And that's what you were intending to say. Is that accurate? Well, so what I intended to say, it's what I said. Is it true? I'm just giving you the facts.
You have a highest rating than last passed in Dashlane on the App Store? On the iOS App Store, yes. Great. Awesome. Let's wrap up here with much easier questions. Famous five. Number one, what's your favorite business book? I don't have a favorite. I would say my favorite... There's several, but I do like The Art of Worldly Wisdom by Baltazar Gracian. Art of Wisdom, you said?
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