The following interview is a conversation we had with Jacob Moshenko, CEO & Co-Founder of Authzed, on our podcast Category Visionaries. You can view the full episode here: $15.9 Million Raised to Build the Future of Authorization Infrastructure
Brett
Welcome to Category Visionaries, the show dedicated to exploring exciting visions for the future from the founders who are on the front lines building it. In each episode, we’ll speak with a visionary Founder who’s building a new category or reimagining an existing one. We’ll learn about the problem they solve, how their technology works, and unpack their vision for the future. I’m your host, Brett Stapper, CEO of Front Lines Media. Now let’s dive right in today’s episode. Hey, everyone. Welcome back to Category Visionaries. Today I’m speaking with Jake Moshenko, CEO and Co-Founder of Authzed, a permission systems platform that’s raised 15.9 million in funding. Jake, welcome to the show.
Jake Moshenko
Yeah, thanks for having me.
Brett
No problem. Super excited and would love to just kick off with talking about what you’re building. So let’s jump right in.
Jake Moshenko
Yeah. So at odds that we build an authorization platform, the goal here is to allow companies to build delightful sharing and authorization driven experiences into their applications. Think what would Google Docs be if we didn’t have the sharing model that it has? Or what if you couldn’t control who could see your Facebook pages or your tweets or whatever? So authorization is all around us, and we have a platform that helps companies build that better and build those delightful experiences.
Brett
Take us back to the founding of the company. August 20, 21st off. That’s an interesting time to build a company where just a couple of months into the pandemic at that time. So take us back to those early days and the founding of story.
Jake Moshenko
Yeah, so it is a super weird time, but honestly, I wouldn’t change a thing. So one of the realizations, we all thought were in it for two weeks to flatten the curve, and, you know, then were going to get back to our normal lives. And when it became apparent that this was potentially going to stick around a little bit longer than we had all thought, and there wasn’t a lot of other things going on, so there wasn’t a lot of FOMO to worry about. So my thought was just like, isn’t this the best time to start a company? We can go heads down. We can build, build. There’s not going to be a lot of distractions. It’ll give us a reason to think about not just doom, scroll, the Internet. And it turned out to have worked out just that way.
Jake Moshenko
So I’m super happy that back when.
Brett
We did it and what were those early days like? So maybe the first three months or first six months, what were you working on? Initially?
Jake Moshenko
Yeah, so we had a pretty concrete idea that were going to be solving authorization pretty much from the start. This is something that we had lived ourselves. So we’re second time founders. The first time around, we founded a company that ended up creating a product called Quay. Quay was the first private docker registry. You can actually still go and buy that from IBM today to just give you a sense of the scale and the journey and whatnot. But as were building that, we always had been struggling with this problem of how do we add these delightful experiences to quay and make it so that our users, like, make it scalable, make it so that our users are happy, but we’re still able to securely ship new features and we’re able to keep up with user demand for features.
Jake Moshenko
And that was never really a nut that we had cracked. And so when we set out to found this new company, we’re like, all right, cool, let’s take that idea and let’s go and solve that for the broader market. So the first month was basically, we’ve got this idea, let’s see what we can do with it, right? Let’s build something and see what we can do with it. And we got a super early prototype, what would eventually become spiced be, which is like the core engine behind our offering. We had a super early prototype of that built in Python within months, and were already using that to power experiences and to sort of like to get our feet wet with using our APIs and seeing what it was like and seeing how it felt.
Jake Moshenko
So we had that super early on, within the first couple of months.
Brett
When it comes to your market category, are you creating a new category or transforming an existing one?
Jake Moshenko
Yeah, that’s a great question. There was a perception in the market that authorization was something that had to bespoke. There wasn’t going to be a platform or a solution that could fit many or most authorization situations. So developers had this idea that they had already come to grips with outsourcing authentication, which is, who are you talking to? But when it came to authorization, which is what are those people allowed to do, they thought, well, that’s going to be very app specific, so I just have to go and build that code. So everybody knew about the need for authorization, but nobody really had a box on their architecture diagram or a budget line item or anything like that in place. And so from that perspective, like, authorization has been around forever, right? Like, as long as humans have had to interact with each other.
Jake Moshenko
But the idea that there can be a piece of infrastructure that we can run or a product that we can buy to help us solve. This is very new.
Brett
What are you doing to evangelize that very new way of doing things?
Jake Moshenko
We’re just trying to get ourselves out there, participating in podcasts such as this one, running ads, participating in conferences, speaking, writing, a lot of thought leadership content, just trying to show people that there is a way, and theres potentially a better way than what they’ve been doing.
Brett
Trey, is there any pushback? Are there any people who hear how you think about this category and think, nope, thats wrong?
Jake Moshenko
Of course, I don’t think it would be a viable startup if everybody thought that it was a great idea and nobody had addressed the market so totally. There are people who are pushing back. We get a lot of pushback from, unsurprisingly, people who have built their careers around writing authorization logic for or their companies. We get pushback from people who still think, despite our success and being able to talk to data points with companies that we’ve been working with, they still think like, this isn’t flexible enough or it isn’t general enough. So, you know, there’s always going to be naysayers, but we just have to keep pushing forward and keep showing people that we can actually do what we claim we do.
Brett
What about working with analyst firms? What’s the approach there? Are you working with Gartner or Forrester to really shape this category?
Jake Moshenko
Yeah, that’s honestly an area where we could be doing better. We talk to them when they call, but it’s not really like cadence that I feel like it should be. Right. So we should constantly be giving them updates about the company and how we’re doing in the category. One of the problems is that there isn’t an existing magic quadrant for this. Right. And to put it in Gardner parlance, so it’s like they don’t really have a great reason to call, and we’re just so busy that we don’t really have a great cadence of reaching out and keeping them informed so, you know, we could definitely be doing more in that area.
Brett
And let’s talk about milestones. So the big milestone we’re going to talk about is hitting 1 million in ARR, which I think any Founder who’s in the early stage, you know, that’s the goal. That’s what they’re chasing. Let’s reflect on that milestone for you. What did you learn along the way? What do you think you got right to hit that milestone?
Jake Moshenko
Yeah, 1 million ARR is a fun one. What did we learn along the way? We learned a lot about enterprise sales. So when we first, like our last company, Quay, was a pull out your credit card and swipe it for under $20 a month to get started. And this new thing, we sell it to the biggest businesses that you can imagine. We didnt set out to do that, but it turns out thats who came through the front door. Those were the people who had the critical need and who really understood the problem and that there was potentially a solution here. So we had to basically pivot our go to market idea on a dime. So you learned a ton about selling to the enterprise. Yeah, approaching the milestone was fun. And it seemed like were always almost right there, almost right there.
Jake Moshenko
And then all of a sudden it was in the rearview mirror. And then, because when a startup like ours, that’s growing exponentially, like, once you cross it in a big way. And like, now the struggle to get there was like, it seems so arduous, but now that it’s in the rear view, it seems like, oh, you know, that was such a small milestone in retrospect.
Brett
Yeah, I’m sure a lot of other founders can relate to that as well. What’s the next big milestone that you’re chasing?
Jake Moshenko
Well, I don’t want to put any numbers to it, but if you think about exponential startup growth and, you know, we’re a vc funded startup and that comes with expectations. So just continuing to grow the company in terms of revenue and to mature the product in terms of how much of the market we can actually address. Yeah, one of the things that I’d like to highlight that we built recently was called offset materialize, and that really allows us to address a bigger category of the market than we had been addressing earlier. It’s like kind of an adjacency, but it only works with our product. So looking for opportunities like that to really expand our market size and to continue to grow our revenue and grow the business.
Brett
Trey, if we look at the go to market motion. What does that look like today?
Jake Moshenko
Yeah. So we get a lot of inbound people who have heard about us or who understand what we’re doing. We have sort of loose association. We were inspired by a Google paper called the Zanzibar paper. So through our association with that, people can find us and they’re looking for, quote unquote, a Zanzibar because this is something that Google does internally, but you can’t buy from them. So based on that, we get a lot of inbound. We also have a lot of companies sniffing around our open source. So we have an open source model, an open source first model, and people sniff around, they use our open source, they set up clusters, and then when it comes time to actually go to production, they want a partner, they want somebody to help them run and maintain this thing for them.
Jake Moshenko
So we basically start from those two sources and we go through the enterprise sales motion. So it’s just a lot of calls and a lot of handholding, but it really does develop a long term relationship and it’s worth it at the end of the day.
Brett
What about the marketing team? What does the marketing team look like?
Jake Moshenko
Yeah, our marketing team is kind of, this is one of my weaker areas as a leader. I don’t have a background in marketing. So what we do is we kind of are trying these data driven experiments. So we come up with a hypothesis, we write it down, we write up a pass fail scenario, and then we go and we try to execute that hypothesis and see how it actually works. So the marketing team is built around being able to come up with and execute those kinds of things and then double down on the ones that are working. But it kind of looks like what you’d expect. We have product marketer and growth marketers, and there’s like an engineering background leader in charge of all of that.
Brett
What’s an example of one of those data driven experiments that you ran that didn’t work out or didn’t meet the expectations and you ended up not going.
Jake Moshenko
Forward with, yeah, I hate to throw them under the bus, but Twitter ads have really underperformed for us. It seems like one of those. I don’t know if you follow Cory Doctorow, but he wrote a, a long article about a term that he coined in shitification. And it seems like Twitter has somewhat gone down that route. They’re interested in selling your own audience back to you. So that’s something that we’ve divested from.
Brett
Yeah. I don’t know what’s going on with Twitter ads. Whenever I’m on there, I get ads for the most ridiculous, unrelated stuff possible. It’s like, it’s kind of hard to imagine worse targeting than what I’m currently seeing on Twitter.
Jake Moshenko
It’s the algorithm you just don’t understand. These are things you don’t know that you need, but you should go buy it immediately.
Brett
That’s true. That’s true. Now, when it comes to that general marketing philosophy, like, how would you describe the marketing philosophy, especially, you know, given the fact that you don’t come from the marketing world, don’t have a background there, how do you think about the marketing approach?
Jake Moshenko
I think if I could describe it would just be the same thing that we apply to engineering but applied to marketing. Right. So you want to fail fast. You want to have data driven decisions, you want to iterate. We have this phrase I like to throw around all the time, which is we’re going to iterate our way to greatness. So it’s just applying that to the marketing domain the same way we apply it to the engineering domain.
Brett
And as I mentioned there in the intro, you’ve raised 15.9 million to date. What have you learned about fundraising throughout this journey so far?
Jake Moshenko
Well, I’ve learned a lot about the macro. We closed our most recent round at the beginning of this year. And if you’ve talked to any founders, which I’m sure you have, who have tried to raise at the end of last year or the beginning of this year, it was not as easy as it was the first time around, back in 2021. So the prevailing interest rates play a big role in that. And then we hit all the milestones that any company our size would be absolutely blessed to hit. But it was still something that we had to put a lot more work into than I had anticipated.
Brett
Trey, what advice would you have for founders who are in a similar position right now trying to raise?
Jake Moshenko
Yeah, thats a good one. I cant speak to the fundraising market right now. I don’t know if its loosened up or if its the same as it was at the end of last year, beginning of this year. But I guess overall advice would be like, you need to just find ways to avoid bankrupting the company. I know that sounds like very cliche, but you know, it can become pretty tactical. So that might be like if you need to getting like an extension round to a previous round of funding, maybe not at the terms you would like, but based on the macro that might be what you can get.
Brett
And in terms of priorities for the next, let’s say twelve months, what are your top priorities?
Jake Moshenko
Yeah, well obviously we have some pretty audacious revenue targets, revenue goals that we’d like to hit. We have some product goals as well. Finding more adjacencies like materialize, where we can get value into the hands of our customers and continue to expand our footprint within existing customers. We have some pretty audacious team growth. Right? Like we’re building the machine that turns all of these panes that our customers are feeling into business relationships and delivering value and delivering more value to them than we charge them. So continuing to build that machine and getting the right people in place to make sure that the machine doesn’t implode, basically.
Brett
Good advice. Good advice. Now, final question for you, lets zoom out three to five years into the future, whats the big picture vision that you’re building here?
Jake Moshenko
Well, I think there could be some really cool things that come out. If all the companies that are out there that are doing authorization, which make no mistake, are all of them, if all of them are adopting a platform, like odds said, then there’s potentially interesting ways for all of that software to start reasoning about each other’s permissions and about each other’s authorization in a more holistic way. And an example I like to give, I haven’t really given too much thought to this, but imagine if you didn’t have to email your receipts from Uber to expensify. What if expenseify could just have a relationship in place and just pull that information because the authorization is all sorted out on the back end.
Brett
Amazing. I love it. All right, now we’re going to wrap up here, but before we do, if there’s any founders listening in that want to follow along with your journey as you build and execute here, where should we send them? Where should they go?
Jake Moshenko
Yeah, I do most of my communication honestly through our blog. So authset.com blog, that’s where we do sort of like our thought leadership fee or just product updates or whatnot. We also have a newsletter and then I’m available in most of, you know, the usual places. But I have to say, at this point in my life, I’m not a huge social media user anymore.
Brett
Fair enough. It makes sense. Jake, thanks so much for taking the time. Really appreciate it. It’s been a lot of fun.
Jake Moshenko
All right, thanks for having me.
Brett
This episode of Category Visionaries is brought to you by Front Lines Media, Silicon Valley’s leading podcast production studio. If you’re a B2B Founder looking for help launching and growing your own podcast, visit frontlines.io podcast. And for the latest episodes, search for Category Visionaries on your podcast platform of choice. Thanks for listening, and we’ll catch you on the next episode.
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