Rob Eleveld - CEO at Ekata

(Joel Beasley at 00:00:00) Hello, my friends. Today we are talking to Rob, the CEO of Ekata, and we discuss autonomous teams that operate within their own envelope, advice for CTOs making the transition to CEO, and actionable steps that you can take to sell your ideas to an executive team. All of this right here, right now on the Modern CTO podcast. Here we go. This is the Modern CTO podcast.

(Joel Beasley at 00:00:37) Hello. How are you?

(Rob (CEO of Ekata) at 00:00:38) These are only my reading glasses, but I can see you better with them on. So since we're not video recording, I'm just going to keep them on.

(Joel Beasley at 00:00:46) You look beautiful, my friend.

(Rob (CEO of Ekata) at 00:00:50) I had to give into these about a year and a half ago, and within like two weeks, I was completely dependent on them.

(Joel Beasley at 00:00:55) Well, you look smart. Like, I trust you more.

(Rob (CEO of Ekata) at 00:00:58) I mean, I need all the help I can get on that front. So I'm going to wear these things night and day now.

(Joel Beasley at 00:01:06) You start wearing glasses, your income goes up, people start treating you differently. Life is good. All because of $5 glasses when you're checking out.

(Rob (CEO of Ekata) at 00:01:17) Exactly. Who would've thought? Exactly.

(Joel Beasley at 00:01:19) Where are you calling in from today?

(Rob (CEO of Ekata) at 00:01:26) Seattle. It actually is colder than seasonally normal, but not wet. So we'll take it.

(Joel Beasley at 00:01:32) All right. All right. You got family? What do you have going on in your personal life? Jumping right into it.

(Rob (CEO of Ekata) at 00:01:39) A lot, man. I got three kids. I'm getting ready to cook a bird. We got some family coming in for Thanksgiving.

(Joel Beasley at 00:01:47) I'm going to show you this. This is brand new. How old are your kids?

(Rob (CEO of Ekata) at 00:01:51) They're all teenagers, which means they're very cynical. Two of the three of them, I get more grief back from them. I made a mistake when they were very young. They didn't understand sarcasm to be sarcastic with them. And now they're so sarcastic with me, it's frightening.

(Joel Beasley at 00:02:08) Look at this technology. So this is like the daycare. They text you like every two hours a picture of them, and it's like detailed what they're doing, what they ate, how much they ate, diaper changes. Is that not insane?

(Rob (CEO of Ekata) at 00:02:23) All right. So I'm going to give you another example here. So understand that I have to travel internationally quite a bit. And I'm over in Europe. We got two offices in Europe. So I'm over there like three, four times a year. And I can't find the examples, but basically, I get texts every day from the dog walker. And so I'm trying to tell people like, back in my day, we would get a Eurail pass and we didn't have any mobile phones. It'd be like, hey, we'll see you in three days, the Amsterdam Train Station Track 11 between 10 and 11 a.m. If you're not there, it's the next day same place. Otherwise, we'll see you in two weeks. Like, that was how it worked back then. Right? Now I'm over there. I'm getting texts from the dog walker each day on how my black lab Indigo is doing. So a little bit different.

(Joel Beasley at 00:03:18) Is it like Rover, or is she just taking that on her own initiative, taking pictures?

(Rob (CEO of Ekata) at 00:03:22) Just like the dog walkers we have, they send texts every day with pictures, how the dog's doing, where they went.

(Joel Beasley at 00:03:29) Well, what type of dogs do you have?

(Rob (CEO of Ekata) at 00:03:31) I have one dog. I can't believe I can't find these texts. They're all over the place normally. We have one dog named Indigo. She's a black lab. There you go.

(Joel Beasley at 00:03:40) Yeah. My wife is actually—we just did the daycare thing. This is new the past couple weeks so that she can attend veterinary school to become a doctor of veterinary medicine.

(Rob (CEO of Ekata) at 00:03:51) I'm a big dog fan. I'm a big animal fan, frankly. I'm a little bit allergic to cats, although I like cats. They like me. Heaven knows they like me.

(Joel Beasley at 00:04:03) It's the glasses. You got me there.

(Joel Beasley at 00:04:05) Oh, man. This is great. You're a lot of fun. So like, I—you're going to be 90, though. Okay. This is the show, by the way. We're already halfway through.

(Rob (CEO of Ekata) at 00:04:17) All right. Great.

(Joel Beasley at 00:04:18) Fantastic.

(Rob (CEO of Ekata) at 00:04:21) Sounds good.

(Joel Beasley at 00:04:22) All right. So how did you, like, where did you get involved with technology? Like, where did it even start?

(Rob (CEO of Ekata) at 00:04:29) Well, although all of my engineers, software engineers, and product managers would like choke on their coffee here, in high school I used to code quite a bit. I had a really good teacher and I did a lot of what we called software programming. We certainly didn't call it engineering back then. And that was a long, long time ago. And then I was an engineering major in college, mechanical engineer, because I frankly got burned out in a couple computer courses. And then I was a submarine officer in the Navy for my first five years out of college and I went through a nuclear—basically nuclear reactor plant management program. We had very heavy engineering. So I was always in very technical things even though I'm not these days a software engineer by any means. And so when I got out of business school after the Navy, I started out in software sales, but part of the reason I was able to is because I could pick up the product pretty quickly. I could demo it myself instead of relying on someone and so forth like that. So I've kind of been around some kind of technical aspect all through my career from college on, really from high school on.

(Joel Beasley at 00:05:42) So when you were on the sub for like all those years, like, how long do you go at a time?

(Rob (CEO of Ekata) at 00:05:48) Well, I was on out here in Bangor, Washington. The ballistic missile subs, known colloquially as boomers, go out for kind of 10 weeks at a time on their deterrent patrols and they come back and switch out crews. I was on a fast attack sub, kind of a typical sub that does other submarine missions. We never had a second crew. The longest we were out was not 10 weeks. Probably the longest we were underway or under the water was about six weeks, which isn't that long by submarine standards. But in three and a half years aboard, we were away from home port more than 70% of the time for three and a half years. So I was underway a lot.

(Joel Beasley at 00:06:31) Wow. And was that a nuclear sub?

(Rob (CEO of Ekata) at 00:06:34) It was a nuclear sub. Nuclear powered. We never carried nuclear weapons. We carried torpedoes and more than that, we carried tactical Tomahawk cruise missiles.

(Joel Beasley at 00:06:44) Nice. So you would like surface and then—

(Rob (CEO of Ekata) at 00:06:47) Yeah. Periscope depth. Periscope depth. Some SEAL operations, but mainly training operations with the SEALs back then. It was before the days of a lot of the sort of global terrorism stuff that's going on now. But it was in the early to mid-90s. The Cold War had just ended.

(Joel Beasley at 00:07:03) So I'm a huge nerd, and I was reading—so correct me if I'm wrong, but I saw like some of the nuclear aircraft carriers, and that means that like they're powered by nuclear power.

(Rob (CEO of Ekata) at 00:07:13) Correct. Yep.

(Joel Beasley at 00:07:13) They could go like 120 years without refueling. Is that wrong?

(Rob (CEO of Ekata) at 00:07:19) Yeah. Basically, they've developed nuclear cores now so they last longer than the ship's life. So it's pretty—it used to be like my boat, the keel was laid in 1972 or '73, and I was on it pretty late in life in like the early '90s, '91 to '94. But all of those boats had a refueling overhaul halfway through. In other words, the hulls and everything lasted twice as long as the nuclear cores. Now all of the ships are putting out—nuclear powered ships and subs—the core lasts longer than the life of the ship.

(Joel Beasley at 00:07:53) That's amazing. I love it. I mean, I'm so geeky and nerdy. I was watching like Einstein's quantum riddle earlier. So like, what is the—

(Rob (CEO of Ekata) at 00:08:02) Don't ask me that. Even the glasses won't help there.

(Joel Beasley at 00:08:10) Oh, spooky action at a distance. Right? So what's Ekata? First of all, the name sounds amazing. When I hear it, it's fun to say. Very cool.

(Rob (CEO of Ekata) at 00:08:18) We call it Ekata. Okay. So our whole team is like, Ekata's coming on.

(Rob (CEO of Ekata) at 00:08:28) Ekata. We spun out of—I used to be the CEO of White Pages. I started it as a VP of sales and then the general manager of White Pages Pro, which was back in 2012, 2013. It was basically accessing White Pages consumer data that was on the website via API for business purposes. And so that business grew and grew. And ultimately the founder and chairman of the board asked me to run the whole company, which was two business units, one consumer, one B2B. And then at Ekata, we basically separated the two businesses—they began to kind of diverge in terms of strategy and so forth. And so we separated and became Ekata. We used to be White Pages Pro, and that was relatively recent in June. And basically, we provide what's called identity verification globally. If you, Joel, are doing a what's called a card-not-present transaction or some sort of payment via Venmo or PayPal or anything else where you're not standing at a counter and someone can't ask you for a second form of identification like your driver's license or something, our data is used to try and verify, is this really Joel or is it someone who's impersonating Joel with some of his data they've bought on the dark web or stolen in some way, hacked into his computer or whatever, and is impersonating Joel from a cyber fraud standpoint to embezzle or steal money in some way?

(Joel Beasley at 00:10:04) Is that happening a lot?

(Rob (CEO of Ekata) at 00:10:07) Cyber fraud is a growth business, unfortunately, for the world. And as more and more of the world economy moves online, it's a really target-rich environment. And especially in places like Russia and China, in a lot of ways, it's state sponsored. So at a minimum, the state looks the other way. You know what I'm saying? So they're not going to do anything. There's no Federal Bureau of Investigation or whatever that's going to break down someone's door in Russia and arrest them for committing cybercrimes.

(Joel Beasley at 00:10:37) Yeah. And I was talking with a cybersecurity person a few weeks ago, and they were saying that like, we were talking specifically about how they'll attack computers and like take over them and then like encrypt their hard drives and then charge them to decrypt their hard drives. And they said that it runs like a business. Like, there's customer support and sales and like, you talk with them, and they act like a business. And I was blown away by that.

(Rob (CEO of Ekata) at 00:11:03) Yeah.

(Joel Beasley at 00:11:03) So you guys are helping prevent that?

(Rob (CEO of Ekata) at 00:11:05) We help prevent—locking your computer is something that's a little bit tangential, but we primarily work with large and global e-commerce companies, online travel agencies. Think like anybody who's selling some sort of a digital ticket online. Almost all of those are customers of ours. And then payment companies, card brands—almost all of the big card brands and payment companies are customers of ours. And our data is just part of what's used, but we have what Gartner calls dynamic personally identifiable information. So static PII is like a Social Security number, date of birth. It's all been compromised. Yours or my data can be bought on the dark web anytime. Dynamic PII is things like email addresses, mobile phone numbers, IP addresses, things that change more, and it's harder for a fraudster to piece together all those things to make it look like Joel. They might be able to get your address or they might be able to get your email. It's hard for them to get your email and your address that's really yours at the same time. So we try and provide what is really Joel out there, and a customer of ours compares what they're getting from an online form when you fill out a payment form or something to buy a ticket or buy a good, and they compare it to our data and say, this looks like it's part of Joel, but then there's a brand new email address or there's this shipping address that's been used 25 times in the past two days that is not associated with him. That's weird. And so that's kind of how our data is used. And then we also have kind of a behavioral element. We hash and anonymize all this data, but we look for velocities and things that are sort of behaving unlike you would behave as a person.

(Joel Beasley at 00:12:53) That's really interesting. And then it seems like time would be really important because the transactions, they process in like seconds. So is that an important part of the business for you guys?

(Rob (CEO of Ekata) at 00:13:03) We have made a four- to five-year investment in reducing latency down from a second and a half down to 80 milliseconds for what the industry calls P99. I'm sure your listeners will know 99% of our API responses in less than 80 milliseconds to basically move from after a payment authorization, which is called post-auth in our industry, to pre-auth before a credit card payment authorization because more and more companies want to decide early on, is this a good customer or not? And maybe if it is Joel, our data's also used to verify it's you, we want to give you a really good—we want to maybe give you an offer and incentive because you're a repeat customer, a good customer. So we want to do that before the payment authorization too because we might want to give you a discount or cash back or some offer to—before you actually authorize the payment, you know, buy two of them or something. So anyway, we've made a four-plus-year investment in reduced latency, and probably as a lot of folks listening to this podcast know, when we were trying to reduce from a second to 800 milliseconds, cut 200 off that, that's way easier to cut 200 off of a second than cut 10 milliseconds off an 80-millisecond response today. Like, the engineering problem is about 10 times as hard. It grows geometrically, not linearly, as you go down that latency curve. And so the amount of engineering challenges we have today—today, we're going from, in 2020, our goal is to go from 80-millisecond P99 to 50-millisecond P99 on our core products. And that challenge is like something we couldn't have fathomed four years ago when we embarked on this.

(Joel Beasley at 00:14:47) You're going to have to buy glasses for everybody.

(Rob (CEO of Ekata) at 00:14:50) Exactly right. I mean, these reading glasses that make me look smart, man, everyone's going to need them.

(Joel Beasley at 00:14:56) How amazing would that be standing in front of your board discussing how you cut the milliseconds? Oh, man. So at what point were you guys like, we need to divest this. We need to make this its own thing.

(Rob (CEO of Ekata) at 00:15:10) Well, we just—when I came to what was White Pages Pro in 2013, it was a little 10-person business unit, and our founder who's a real entrepreneur's entrepreneur, Alex Algard, my boss, he's the chairman of the board of this company today, had kind of a gleam in his eye about a B2B business unit. It was 10 people. It was small. It was a $2 million run rate flat in 2013. But since then, we've been able to grow 50% a year every year, year over year over year.

(Rob (CEO of Ekata) at 00:15:41) And we don't burn a ton of capital because we're not playing with venture money or the house's money. We're playing with the Aylward family portfolio. And so we play it pretty close to the vest. And so we've been able to do that without just throwing capital at the wall. And so at some point we had opened up a pretty big operation in Budapest, Hungary. We were opening up Amsterdam last year as a sales and marketing office.

(Rob (CEO of Ekata) at 00:16:09) We're opening up Singapore at the end of this year. So the Ekata identity verification business had gone global. Whitepages.com is a consumer business. It's more domestic. And so the strategies just started to diverge.

(Rob (CEO of Ekata) at 00:16:23) You know, a lot of our engineering, as we just talked about, was focused on things like latency and so forth. 80% of our business is API driven, whereas the consumer business is all through website and conversion rates and so forth. So it's just a very different strategy, and we were investing in different things. And we had gotten big enough that from a cash flow standpoint, we were self-sufficient. For the early years, we basically had been funded by the profits of the consumer business, which was a more mature and profitable business, and so we didn't need that anymore.

(Rob (CEO of Ekata) at 00:16:57) So those were the reasons that we separated. The other thing was I ran two business units at that time, and it was just, you know, it's easier to focus when each business was separate. They could focus on the things they're doing. The consumer business is run by a really sharp woman named Lee McMillan, who I initially hired, who started as VP of Marketing and then quickly became the GM of the consumer business. Now she's CEO of White Pages, and she's great.

(Rob (CEO of Ekata) at 00:17:22) And she can focus all her time and effort, her team's effort, on that business. So that's a win for everybody.

(Joel Beasley at 00:17:28) So do you target, like, developers? Like, who do you market to? Who do you advertise to?

(Rob (CEO of Ekata) at 00:17:33) We market and advertise to kind of three groups: product managers, data science and modeling teams and risk. And then at the executive level, either a Chief Security Officer or Chief Risk Officer, sometimes that rolls up to the CFO. So those are kind of the three executive sponsor types that we have. But our day-to-day work a lot of times is with product managers or product managers and modeling teams that are effectively doing ML models for decisioning on whether to approve or reject a payment request or an order for a ticket or a good or service or a new account sign-up of some sort.

(Joel Beasley at 00:18:25) So there's just different parts. Like, my mind is always isolated, you know, very segmented in my mind to, like, the SaaS-type industry where you get Stripe and they have the features. But in all these other parts of the market, they're needing to build these systems.

(Rob (CEO of Ekata) at 00:18:39) Yeah. I mean, Stripe's a customer of ours just as an example. But behind the scenes on their products, they're helping their customers decide, you know, what payments are good and not good in a number of different ways. And some of the time they're on the hook for that. Some of the time their customers are on the hook for that.

(Rob (CEO of Ekata) at 00:18:59) But they're trying to provide, through the data and data science horsepower that they've got, they're trying to assist their customers on assessing good versus bad payments. And in order to do that, they run a bunch of ML models, and ML models are only as good as the data that goes into them. So we spend a lot of time on normalizing the data that we work with, this dynamic PII that I talked about, into model features. You know, one-zeros, categorical responses, a numeric range where the model decides where the branch-over point is on the range.

(Rob (CEO of Ekata) at 00:19:34) But we provide that in a normalized way, because most modeling teams will say, "Well, we're gonna use our internal data first," and then they realize, "Well, the internal data is hosted by a different team over here and a different team over there. It was never persisted in a way to use as a model feature. So now I gotta cleanse it, normalize it just to test it, and try and build some features out of it." Then if that's the case, then I gotta go borrow resources from this other team, this other P&L to build a service that will store that data the right way and have an uptime of four nines and a P99 response of, you know, internally a hundred, hundred and fifty milliseconds just to feed my model. All of those things need to happen with some group whose core mission is not feeding my model.

(Rob (CEO of Ekata) at 00:20:16) And in general, you know, we're sort of there and ready to go and pretty good at what we do. And so they, we help in that. We always call it a layered approach. Our data is never the only thing in a model.

(Joel Beasley at 00:20:28) So rather than them going out and building that whole section, they're just like, "You guys are experts over there. Let's just use them."

(Rob (CEO of Ekata) at 00:20:33) Exactly. They sort of start with us and then build on to that.

(Joel Beasley at 00:20:37) Nice. So what is your team look like? Like, what is your direct report team look like?

(Rob (CEO of Ekata) at 00:20:42) I have a SVP of Product and Operations guy named Kushal Shahat. Awesome, awesome guy I've worked with here since he started as a raw product manager, but had been a founder, you know, startup guy before that. He'd also spent a lot of time at Microsoft. I have a VP of Engineering, Varun Kumar, who worked for Amazon for a number of years, but also worked at startups. You should kind of feel this yin and yang of a lot of people here: entrepreneurial, but they also have some big company experience.

(Rob (CEO of Ekata) at 00:21:15) So my general philosophy is that product and engineering should be separate. I almost never have to play tiebreaker between those teams, and frankly, I wouldn't be managing it well if I did. But there's always a healthy, you know, sort of yin and yang balance between product and engineering, and so I like to keep them separate. And then I've got a VP of Global Marketing. I've got a VP of Sales that reports to me that has a number of different sales channels.

(Rob (CEO of Ekata) at 00:21:43) I've got a VP of Account Services and Customer Success. She runs a global team in three continents. And then our CFO, Jason Eglit. And so that sort of rounds out my direct reports.

(Joel Beasley at 00:21:59) So I've been getting a lot of questions from CTOs about how they make the transition to CEO. And what sort of thoughts do you have there?

(Rob (CEO of Ekata) at 00:22:11) Well, we have a, you know, so first of all, I'm a sales guy by background in technology. Right? I started out carrying a bag in enterprise sales. So at one level, I may not be like the best. I don't have a, my own career path didn't start on the technology and engineering side.

(Rob (CEO of Ekata) at 00:22:34) What I would say though is the more they can get outside the company, the better. Okay? Now we have seven operating imperatives here. The first is we build enduring customer relationships. And there isn't a person here that isn't trying to get to touch customers because I value it so much and our executive team values it so much.

(Rob (CEO of Ekata) at 00:22:53) So like, our VP of Engineering is out with customers. Not a ton because he's gotta be VP of Engineering, but like, he's out there. He speaks at a couple conferences a year. So just generally, he's out in market externally. And I think that's a key thing, because the market is messy out there. There's a lot of variables you can't control.

(Rob (CEO of Ekata) at 00:23:15) Customers tell you things you don't wanna hear. You whiteboard something the way you think it should work. It never works that way in the market, you know. And so the more that the CTOs begin to get comfortable with the variables that they can't control outside the four walls of the company, the better they'll be as a CEO, I think. So that would probably be my number one item.

(Joel Beasley at 00:23:40) Yeah. I love how you answered that, by the way. That was my favorite. I'm gonna, like, highlight that and make a blog post about it. Okay.

(Joel Beasley at 00:23:49) So alright. So you explained a little bit about your culture with it being some people have some, you know, big box experience, some entrepreneurial experience. Is that, like, you found it to be very important, or, like, I want you, the question isn't well formed, so that's on me. But I want you to talk a little bit more about, like, is that a requirement for everybody or is that just a pattern you've noticed?

(Rob (CEO of Ekata) at 00:24:15) So I've been a CEO a couple times. And the first time, I was 33. I'd been in enterprise sales for a couple years, you know. I wrote a business plan, and it was software as a service before its time back in 2000. It launched in 2000 just before the first tech bubble burst.

(Rob (CEO of Ekata) at 00:24:35) I ran it for six years. I raised like $26 million of capital, more than I ever meant to raise. That's not a lot of money these days, but back then, it was a lot of money. It didn't work. It was a hard fail.

(Rob (CEO of Ekata) at 00:24:47) Like, I turned the lights off at the end, and I learned a lot from that. And it was a really hard thing professionally because I don't throw in the towel easily. And then I've, you know, been a CEO a couple times since then in various places. And so I had a couple of feelings when I got here and things I'd learned just the hard way over time. And so, you know, a couple of those roll into our culture today, and they're very kind of essential to what we do.

(Rob (CEO of Ekata) at 00:25:17) The first is, we have one of our other seven operating imperatives called "Bring a Point of View." And basically, I tried to do too much the first time I was a CEO. I tried to carry that thing on my shoulders every time. Like, we were in the aerospace industry. It's a long sad story. It would take me a lot of beers and a lot of tears to tell you about, but it was a market that didn't move fast.

(Rob (CEO of Ekata) at 00:25:40) And so when things weren't going well, I just had to raise more capital basically to try and keep the company moving. And I tried to carry that thing on my shoulders too much. And so what I learned, and frankly, a woman that was my Chief Operating Officer for the last two years there really taught me, Carla Corcoran, was like, "Don't, when someone brings you something, don't immediately have a response." And so I learned from her, my response should be, "What do you think we should do?" Like, "Hey Joel, if you bring me a problem, great, but like, the first thing I'm gonna ask you is what do you think we should do?" And what that does is it trains you not to bring me a problem, but know that if you bring me a problem, I'm gonna ask you what you think I should do.

(Rob (CEO of Ekata) at 00:26:25) So what that does is two things. Number one is it empowers you a little bit, right, because you start thinking like, "Man, if I have an idea, usually, like, I'm gonna get listened to." Right? Two is from my standpoint, it gives me a lot more leverage. Why?

(Rob (CEO of Ekata) at 00:26:40) Because I don't need to figure every problem out. I just need to ask people what they think we should do, and like 90% of the time, what we should do is like a gray area. It's not like a right-wrong answer. It's like, "Well, we could go this way or that way." And so if I say, "Well, gosh, I mean, I could really think hard about this, or I could just do what Joel says we should do." What's that do? Well, unless I've like seen the movie play out and I know there's like this really bad crash and a lot of smoke and like blood at the end, we should just let Joel implement his idea. Why? Because he's gonna implement it five times as hard as if I tell him to do something else, which is usually about what the success rate is, is how hard it's implemented. Right?

(Rob (CEO of Ekata) at 00:27:21) That's number one. Number two, I've empowered him to do something. Number three, I've given myself some leverage because I don't need to worry about that now. Joel had an idea on how to solve the problem, he's going to solve it now. So I've trained my entire executive team to do that.

(Rob (CEO of Ekata) at 00:27:34) They've trained their direct reports to do that. It's embedded in our company culture of "Bring a Point of View." So literally, there is a muscle memory function here that I've trained all of the leaders and managers and product managers on, we call them line managers here. Someone comes to you with something, the first thing out of your mouth is not "We should do this" or "We should do that." The first thing out of your mouth is "What do you think we should do?"

(Rob (CEO of Ekata) at 00:27:57) And it's trained the whole company that way. So as a result, we tend to index towards people that want to be able to be empowered. They tend to be entrepreneurial. I say a lot, like, you know, you put a wall in front of someone on my team here, and they'll stand back there and look at it for fifteen seconds, and you start wondering, like, "Are they gonna step back? Are they gonna turn away?" None of that's going through their mind at all. They're just looking at, like, "Am I gonna go around this thing left to right, crawl over it, go under it, go through it?" There's fifteen seconds where they're deciding how they're gonna get through that barrier, and then it's just go. And so that is the entrepreneurial kind of team we have and we try to empower them. I don't try and micromanage them.

(Rob (CEO of Ekata) at 00:28:36) We try and give them operating envelopes. I learned in the military a lot about giving operating envelopes so when people fail, because they gotta fail, they gotta fail to learn, but they shouldn't fail so badly like the company fails or we have some, you know, giant meltdown in our financial statements. So we're trying to find operating envelopes. So that's a little bit about kind of our culture and the types of people that sort of self-select here.

(Joel Beasley at 00:29:01) We're gonna, like, inject, like, post-edit like a crowd cheering. Yes. Video edit. I don't know.

(Rob (CEO of Ekata) at 00:29:09) What'd you ask, Joel? Yeah. I can say that one without glasses.

(Joel Beasley at 00:29:15) What? But I gotta, I gotta dive into that. What is an operating envelope?

(Rob (CEO of Ekata) at 00:29:20) Well, you know, so I'll give you sort of, back in the day. So just as an example, most people that haven't been in the military think that the military is this top-down thing. You see movies and there's like someone barking orders and, like, you know, "Salute. Yes, sir. No, sir. Yes, ma'am. No, ma'am. You know, do some push-ups," whatever. It's all crap. Like, the military in general is about, "Hey, we're gonna have small groups of people out there on their own, you know, finding their way."

(Rob (CEO of Ekata) at 00:29:50) They're gonna be on watch in the mid-watch on a ship. They're gonna be on some mountain top trying to draw bearings and do some scouting or something. They've gotta be able to make distributed decisions. Okay? And so the military trains junior officers and non-commissioned officers, which are enlisted but have grown up through the ranks, to be very autonomous and make decisions inside of an envelope.

(Rob (CEO of Ekata) at 00:30:15) So if you're a platoon leader, you've got, you're inside of a company of three platoons, but inside of that platoon of about 30 people, you and your non-commissioned, you know, master sergeant or whatever, in the Navy as a Chief Petty Officer, are making a lot of decisions. And so they've got an operating envelope that's about what that 30-person team can do, how much ground they've gotta cover, what their mission is for the day or the week. You can translate that very quickly into a sprint team. It's a product manager. It's a development lead.

(Rob (CEO of Ekata) at 00:30:46) It's four or five people. They've got a sprint of two weeks. They gotta make decisions day to day on how that sprint's gonna go. They gotta do a retrospective on that sprint at the end. They've gotta decide what the next sprint is, how they're gonna bid the story points.

(Rob (CEO of Ekata) at 00:30:59) That is a set of decisions that are made every day in standups on what I call here the edge. Right? It's where the decisions are made, and what I tell everybody is the edge is nowhere near my freaking desk. It's in the sprint teams. It's out with the customers.

(Rob (CEO of Ekata) at 00:31:14) There's people making decisions of what to say and not say to a customer every day. I can't micromanage that. We'll never grow that way. We gotta empower those people. We gotta train them, and we gotta give an operating envelope.

(Rob (CEO of Ekata) at 00:31:24) So in pricing, we have a really complex pricing matrix because we price across five orders of magnitude of volume. We have customers that do 10,000 queries a month. We have customers that do tens of millions of queries a month. It's the most complex pricing thing I've ever seen. So we have a pricing matrix, but they have to be able to operate within that. That's their operating envelope for pricing, but they have to be able to operate within that with some leeway.

(Rob (CEO of Ekata) at 00:31:51) And so, whether it's a customer-facing team with the customer, whether it's product managers and development leads, whether it's data scientists deciding when a model is good enough—like, that's a really hard thing to decide. When's this model ready for release? Because you can always test more features, right?

(Rob (CEO of Ekata) at 00:32:09) Always. So at some point, you gotta call it good enough. I can't call it good enough. My senior vice president of product can't call it good enough. He's not close enough to it. We gotta have that product manager and that data scientist who's on that model be able to call when it's ready for release. Right? So those are the operating envelopes we decide, and then we empower small teams at the edge to make decisions day to day.

(Joel Beasley at 00:32:33) Oh, I love it. I wanna come work for you guys. I'm sure people are thinking that themselves. If they wanna find out more information, where do they go?

(Rob (CEO of Ekata) at 00:32:44) Ekata.com. We're always looking for good folks. We have some people work from remote, but in the US, our headquarters in Seattle, we have a team in Amsterdam, we have a team in Budapest. We're just opening an ops in Singapore right now. We've got a couple different AWS instances here in the US and over in Frankfurt, Germany.

(Rob (CEO of Ekata) at 00:33:04) We'll be opening one in Singapore middle of next year. So we've got a—we're excited about our mission and what we're doing.

(Joel Beasley at 00:33:15) Singapore is getting really popular. I keep hearing it come up in conversation constantly.

(Rob (CEO of Ekata) at 00:33:19) Well, it's one of those places where, first of all, just geographically, it's been on the trade routes and kind of one of the most critical trade routes in the world since time immemorial. Right? And it's at that choke point at the end of the Malay Peninsula. It's a merge of a lot of cultures. There's Chinese influence, Indian influence, Malay influence. Great food, by the way. Everybody speaks English there as a first or second language.

(Rob (CEO of Ekata) at 00:33:53) They're all super well-educated. The government supports technology, and it's got a defined set of business law, which right now in China is becoming very dicey for entrepreneurs and people who have made investments in China because business law is just sort of going away. But not in Singapore. So it's a great place to be. Plus, we travel a lot to see customers, and it's a hub geographically. You can hop on a plane and be anywhere, basically, in the Asia Pacific region in about an hour and a half, and we travel to see customers all the time.

(Rob (CEO of Ekata) at 00:34:25) So our team there will be able to get to Indonesia or Thailand or—Australia is a little further, but sort of anywhere in the Asia Pacific region very easily.

(Joel Beasley at 00:34:37) That makes sense. Right? Centrally located, modern. And I'm excited because I wanna go try the food.

(Rob (CEO of Ekata) at 00:34:44) Exactly. Amazing food there, by the way. You can eat all day, every day.

(Rob at 00:34:49) So I wanna talk—

(Joel Beasley at 00:34:50) A little bit about sales because you have a sales background. Yep. Also got the geek tech background. I have a couple CTOs, VPs of engineering, people that have been asking me—one question specifically was about trend like divesting or creating a new product within their teams. Like, they have their normal core product that they're doing, and they've been doing that for maybe ten years, and they wanna boot up something else.

(Joel Beasley at 00:35:19) But here's where it gets tricky. They have to go sell this idea of the investment to the executive team, to other members of the executive team. And they don't have a sales background, right? Because they're CTOs.

(Rob (CEO of Ekata) at 00:35:33) Yep.

(Joel Beasley at 00:35:33) Great product, great managers, leaders, but they don't have a sales background. Where do they go look? What sort of advice—do you have a favorite sales training book, or how do I just get my feet wet with learning how to sell my ideas to other people?

(Rob (CEO of Ekata) at 00:35:48) Yeah. Great. That's a great question. We talk a lot about this right now internally, and what I would call that is change management. Because selling at the core—when people say sales, a lot of people in their mind, they think, oh gosh, used car salesman, twist your arm.

(Rob (CEO of Ekata) at 00:36:07) Sales isn't about that at a professional level and not at a B2B level internally or externally. What sales is is like, hey, if Joel was gonna make a decision based on some set of parameters and influences and so forth, and he was gonna go a 40% of the time and b 60% of the time. If I'm involved and I can sort of sway Joel a little bit, and we flipped a coin—we had to make that decision in some kind of a modeling exercise a hundred times. Suddenly, with my involvement, it's gonna shade more towards a because that's what I want him to choose.

(Rob (CEO of Ekata) at 00:36:41) Maybe instead of, being uninfluenced, he picks a 40% of the time if we simulate this thing a hundred times. With my involvement, he picks it 55% of the time. That's a win, right? Because I can't make the decision for you.

(Rob (CEO of Ekata) at 00:36:54) And by the way, if you feel like I'm trying to control you, you'll never do what I want you to do. Right? But if I somehow give you information, I give you inputs and different things to sway you towards where I want you to go more often. That's what sales is about. It's really about influencing decisions.

(Rob (CEO of Ekata) at 00:37:11) Alright? And internally, a lot of influencing decisions is about change management. Alright? So internal sales are really about change management because we've been doing this one product for ten years in your example, right?

(Rob (CEO of Ekata) at 00:37:24) So good lord, Joel, seriously, you can't really believe we're gonna break this off into some other product. Everybody in the whole company thinks about this one thing we've been doing for ten years. We've always done it that way. How many times a year: we've always done it that way. And so if you think about change management, there's a couple ingredients. Number one is, you gotta sort of build a coalition. Right? It's gotta be a little bit bottoms up. In other words, hey.

(Rob (CEO of Ekata) at 00:37:49) Two or three of my peers also believe we should do this, and that may take a while. You might take them to lunch. You might talk about it with them. You might formulate what they need to understand to sort of be bought in. So you get a little bit of—you got more than just you trying to do it.

(Rob (CEO of Ekata) at 00:38:02) The second thing is you may need some executive sponsorship. So, if you're a CTO, your executive sponsorship is probably the CEO, right? And you probably need to soften that person up, socialize this idea a little bit, so the first thing they see is not some frontal assault in some big meeting about we should break off this product. Rather, they've sort of been socialized. The third in change management is some kind of compelling, small but impactful, either analysis or slide deck or something.

(Rob (CEO of Ekata) at 00:38:33) I tend to like a two- or three-page analysis in Word because when you do things in Word versus PowerPoint, you think deeper. Right? But on top of that, you also need some kind of visual impact. Right? So let's just say the visual impact is, hey.

(Rob (CEO of Ekata) at 00:38:53) We've had this product for ten years. It's been on a slow decline in revenue or usage or something for the past three years. And so I just wanna make everyone clear, even though this is our core product, it's in a slow decline. Here's the chart to see it. So everyone's on the same page.

(Rob (CEO of Ekata) at 00:39:07) We gotta do something here. In the military, not making a decision is actually making a decision. Right? So we're very biased towards making a decision. Any decision is better than no decision.

(Rob (CEO of Ekata) at 00:39:20) And so, so then once you've got that visual, then you've got some other visual of why whatever decision you're making is gonna—because most people are visual. They'll remember very little about what you say, but they'll remember some visual chart. Right? And then the last thing about internal is I call it repeat the message. Right?

(Rob (CEO of Ekata) at 00:39:40) If I say repeat the message here once a month, I say it—I'm not kidding—200 times. Because whether it's with customers, whether it's internal, if you're trying to change something, saying it once will not matter. Saying it twice will not matter. Saying it five times might. I tell everybody when we're out with customers—and this goes the same with internal—that customer thinks about us once a month for the half hour you're sitting in front of him or her.

(Rob (CEO of Ekata) at 00:40:06) Right? We think about us all the time. Right? I know all about us. Right?

(Rob (CEO of Ekata) at 00:40:11) That customer is thinking about us a half hour while we're sitting there with them. And hopefully we're in front of them, because by the way, if we're talking to them over the phone, they're checking their email. They're doing other stuff. They're multitasking, right, which means they're not concentrating on us at all. The likelihood they will remember what we tell them the first time—think about all the noise in your life, Joel. You got freaking your phone going on.

(Rob (CEO of Ekata) at 00:40:33) You got social media. You're getting texts from your wife. You're getting texts about—the picture from the daycare. Right? I gotta look at that for a minute.

(Rob (CEO of Ekata) at 00:40:40) And all of that stuff's distracting you. So the first time I tell you something, the likelihood you remember it, 20% on a good day. Right? The second time, it moves up a little bit—20% compounded. So by the way, by the fifth time, you're not gonna 100% remember it, but compounding that 20%, there's maybe like a 50% chance you'll remember on the fifth time.

(Rob (CEO of Ekata) at 00:41:01) Right? So you just gotta repeat the message over and over. And when I'm trying to change something internally here, I start to know I'm making progress when I see the eye rolls. Oh god, Rob's gonna talk about training and onboarding again.

(Rob (CEO of Ekata) at 00:41:16) He's gonna do an inventory of training and onboarding by team. Oh, he's in all-hands. He talked about training and onboarding. And when I start getting the eye roll, I know I'm making progress, man. They know the message is coming.

(Rob (CEO of Ekata) at 00:41:26) Same freaking message, not a new one. Right? And so, anyway, build a little bit of a groundswell in terms of change management and selling. Build a little bit of a groundswell with some peers. Have some executive sponsors so you got this sort of yin and yang of bottoms up, top down. Build some kind of a short, compelling analysis with a visual.

(Rob (CEO of Ekata) at 00:41:53) Some visual that makes a statement of why we gotta do something or what we do, how we'll improve things, and then repeat the message.

(Joel Beasley at 00:42:02) I love it. Dude, you're straight fire. This is like a bold episode for me. Way to end a Friday strong. I don't even know what to ask you next.

(Joel Beasley at 00:42:12) I'm all nervous now. I'm like, alright. No. I've got it. This is gonna be a good one.

(Rob (CEO of Ekata) at 00:42:16) I tell you. You got started with the glasses, and I just got on a roll.

(Joel Beasley at 00:42:22) I love it. They're magic, man. Okay. Let's talk a little bit about product and what you're most—in the future. I think we had a good wrapping up point.

(Rob (CEO of Ekata) at 00:42:33) Like, yeah.

(Joel Beasley at 00:42:34) What are you really excited about? What are you jumping out of bed in the morning for? What's coming down the pipeline?

(Rob (CEO of Ekata) at 00:42:40) Yeah. Well, when we started here back in 2013, 2014, we focused on a couple of dynamic PII—personal identifiable information—elements to help identify someone: address and mobile phone number. And then we added email and then IP. And more and more today, we put those things in models and we derive our own elements. Okay? So we work with our customers to get training data, and we're compliant with GDPR and all of the things globally.

(Rob (CEO of Ekata) at 00:43:11) We were very careful about being compliant with all local laws and all of the privacy that's tightening down and so forth. We anonymize data. We hash data. But we more and more are modeling elements, and those model elements are stronger signals for our customers to help make decisions on whether this is fraudulent or good—this person, this transaction—than just the elements in the raw. And so the more we can help our customers make decisions through modeling, the better, and the stronger it makes our IP. So I'm really excited about that.

(Rob (CEO of Ekata) at 00:43:44) And then if you combine that with latency, we've moved into this pre—what the industry calls pre-auth window, or pre-credit card authorization window, or pre-payment authorization window. And it's a steep buy-in. If you're not playing on the $3,600 table in Vegas, you're playing it with the deep-pocket people on the $100 buy-in table. Right? And so you basically—to get into that, you've got to have a product that is up all the time.

(Rob (CEO of Ekata) at 00:44:13) You've got instances on multiple continents so that anywhere—we figure anywhere our customers need to be, they need to see maximum 30 milliseconds of wire travel time there and back and then an 80-millisecond response. And that fits into this pre-auth kind of 150 to 250-millisecond window. Of the companies in the space, maybe one in ten can make that window. So we've paid for the buy-in. Right? We're at that table now. And so now we're gonna keep driving down that curve on the response time, and we're gonna get more and more customers to understand why pre-auth is really important.

(Rob (CEO of Ekata) at 00:44:48) It's really important for a really esoteric thing going on in the EU called Payment Service Directive 2. It's a long story. Most of your listeners don't even want to know about it, but it's some new requirements in payments for card-not-present transactions that are gonna drive a lot of things towards pre-auth. We're right there. We're right on the breaking wave of this market movement.

(Rob (CEO of Ekata) at 00:45:11) We're really excited about it.

(Joel Beasley at 00:45:13) Alright. So I'm somebody. I want to learn more about this problem. I wanna contact sales. I wanna work at the company.

(Joel Beasley at 00:45:20) All of that on your website?

(Rob (CEO of Ekata) at 00:45:22) All of it at Ekata.com.

(Joel Beasley at 00:45:26) Okay. I love it. Now I'm gonna give you one last question here. Alright, Joel. Hypothetical question.

(Joel Beasley at 00:45:31) So you're in your twenties. You're on the nuclear sub, right? And you walk into the other room, and there's Elon Musk, right?

(Joel Beasley at 00:45:42) And he asked, you'd give one piece of advice. He's like future Elon Musk, okay?

(Rob (CEO of Eqada) at 00:45:46) Okay.

(Joel Beasley at 00:45:47) He's traveled back in time, and he's asking your past self. And you're with him, by the way. So you're 24. I'm very clear about this. So you're a 24-year-old you on the nuclear sub, alright.

(Joel Beasley at 00:45:58) Walk into the bridge. Is that a thing?

(Rob (CEO of Eqada) at 00:46:01) Do you walk in a control room, maybe? Yeah.

(Joel Beasley at 00:46:03) Walk into the control room. Thanks for the assist. And there is Elon Musk and current you, like today, with the glasses. With glasses.

(Joel Beasley at 00:46:12) Thanks for—

(Rob (CEO of Eqada) at 00:46:12) That clarification, darling.

(Joel Beasley at 00:46:14) With glasses and Elon Musk. And you're like, what is going on? You don't even know who Elon Musk is. And you give yourself one piece of advice for the future, just one. What would it be?

(Rob (CEO of Eqada) at 00:46:24) Enjoy the journey. Yeah. A lot of people in technology spend a lot of time focused on the destination, which is some big outcome or big win or IPO or big exit or whatever. You talk to people who have been through all those and they're bored, they don't know what to do anymore, or they thought they'd be really happy and then they're not that happy or whatever. But, you know, the journey is about getting up every day and trying to slay the dragon with the team around you and trying to make things happen. And I had a—you know, I mentioned earlier in the podcast, I ran this company for six years. I poured my life into that business, and it didn't work. It failed.

(Rob (CEO of Eqada) at 00:47:03) And in a lot of ways it was a blessing because I learned a lot there, and I also learned that the outcome was a little bit less than just enjoying the journey. And we've got investors and shareholders and board members. We gotta have good outcomes and all that stuff. But what gets me up every day is not thinking about an outcome. What gets me up every day is, you know, we're shoulder to shoulder here, small team, super aggressive, innovate. You know, another one of our operating imperatives, innovate in dog years. I get up every day energized by the people around me and our customers.

(Joel Beasley at 00:47:35) Dude, I love it. You're gonna get so much outreach because of the amazing culture. Look, I'm going to have Chloe book me to speak somewhere in your area just so I can come hang out and stop by.

(Rob (CEO of Eqada) at 00:47:47) Anytime you wanna talk or stop by our offices, we'd love to have you, Joel.

(Joel Beasley at 00:47:50) Awesome. Thank you so much for coming on and hanging out, dude. We did it. We made a podcast. Is there anything we didn't cover that you wanna get out?

(Rob (CEO of Eqada) at 00:47:57) No. It's just I've gotta figure out—these are reading glasses, and they're blurry long distance, so I gotta get clear. I gotta get, like, no, you know, without any, so I can wear them day and night now. So I look this smart and sound this good all the time.

(Joel Beasley at 00:48:10) Yeah. Track your closing ratio too. Have a great Thanksgiving, dude.

(Rob (CEO of Eqada) at 00:48:16) You too.

(Rob at 00:48:18) Thank you, Rob. You're the best. See you, bud. Bye.