Exploring 1Password's Strategy, Cybersecurity Trends, and AI on Data Governance w/ Jason Eberhardt

[00:00:02] Dave Sobel here at IT Nation Connect on another bonus episode. I'm joined by Jason Eberhardt of 1Password. Jason, thanks for joining me today.

[00:00:10] Jason Eberhardt Thank you so much for having us, Dave.

[00:00:11] Dave Sobel. We've known him in a long time. We've had a long time to get you on the show.

[00:00:15] The first thing I just want to get a bit of a ground set is tell me a little bit about what's going on at 1Password. Because from my perspective, I would have said like, that's not a company I would have immediately said is like an MSP channel-focused company.

[00:00:25] So give me a little bit of sense of like the why and what you're up to.

[00:00:29] Jason Eberhardt Yeah. So one of the great things about 1Password is the culture and the people and how much they care about their customers. That's what kind of draw me to them. They have over 150 partners and over millions of users, and they never had anything MSP related.

[00:00:41] So bringing me in and looking at that has made them, it's an OKR of our company. It's a focus of our company, and it's something that is very unique for me. But we're also a multi-product company now.

[00:00:51] Jason Eberhardt So we're also going to not only do a password. So we started in 2005, and then in 2018, we came out with an enterprise manager, which is actually a password manager for enterprise.

[00:01:01] And then the next level is when you're working with consumers is to start working with MSPs.

[00:01:06] So a lot of the consumer products are sold to people that work with MSPs. So that's kind of the connection there.

[00:01:10] Jason Eberhardt It makes sense because I just wanted to get a little context of like why 1Password.

[00:01:13] Jason Eberhardt Now, I want to take a quick step back and do a little bit of the broader cybersecurity market because this feels like you've played in this market.

[00:01:21] Jason Eberhardt It's a very crowded market.

[00:01:24] Jason Eberhardt And there's actually an interesting tension that I'm feeling between the cybersecurity market, which has a ton of players.

[00:01:30] Jason Eberhardt But when I sit in the keynote and listen to, for example, ConnectWise talk today about a platform play, there's a tension there.

[00:01:38] Jason Eberhardt Yes.

[00:01:38] Jason Eberhardt And we've got a lot of solution providers that are trying to whittle that down.

[00:01:41] Jason Eberhardt How do you reconcile that best in breed, all this products out there versus a push to platform?

[00:01:48] Jason Eberhardt Yeah, that is a good point to bring, Dave, because that is happening and that's been happening for years now.

[00:01:53] Jason Eberhardt What I do is I create relationships with the RMMs and the different companies so that we can get into that stack.

[00:01:59] Jason Eberhardt But what they're going to do is move.

[00:02:01] Jason Eberhardt So we also have to move it as an MSP vendor.

[00:02:03] Jason Eberhardt So we have to find ways to bring in direct.

[00:02:05] Jason Eberhardt I haven't done direct MSP before.

[00:02:06] Jason Eberhardt We're doing that now, right?

[00:02:08] Jason Eberhardt We're going to do RMM.

[00:02:09] Jason Eberhardt We're going to do the distribution.

[00:02:10] Jason Eberhardt We're going to do telcos, et cetera, et cetera, right?

[00:02:12] Jason Eberhardt We're going to do all those things where in the past you signed up with ConnectWise, you signed up with like Ninja, you signed up with one of those guys, they do the sales for you, they get the revenue, right?

[00:02:20] Jason Eberhardt Right.

[00:02:20] Jason Eberhardt So it's one of those things where you have to do both now versus where it was only focused on.

[00:02:24] Jason Eberhardt That's what I would say.

[00:02:25] Jason Eberhardt Okay.

[00:02:26] Jason Eberhardt And again, just to give a look, a lot of the MSPs don't always understand the mechanics and the approach that you take to this.

[00:02:32] Jason Eberhardt Because again, you used a keyword, right? Direct. What you mean by this direct to MSP, not direct to customer.

[00:02:38] Jason Eberhardt Correct.

[00:02:39] Jason Eberhardt Although of course you do have a two consumer product. Give me a little bit of the sense of the way that you think about resolving even the channel conflict that happens with, let's put aside the consumer.

[00:02:52] Jason Eberhardt You've just talked about two channel markets that are going to have conflict. Talk to me about how you think about reconciling.

[00:02:59] Jason Eberhardt So one step back, we just hired a channel chief on the other part of the business to do the reselling.

[00:03:03] Jason Eberhardt Okay.

[00:03:04] Jason Eberhardt So there could be channel conflict there too. So there'd be channel conflict, conflict, conflict, conflict, right?

[00:03:07] Jason Eberhardt Right.

[00:03:07] Jason Eberhardt So what I look at always, so what I do is I create tier and structured pricing.

[00:03:11] Jason Eberhardt Okay.

[00:03:12] Jason Eberhardt And the way I do that is I do it if you lower, if you raise your business, you get more NFRs and you get a bigger discount.

[00:03:17] Jason Eberhardt And when that comes, any partner that wants to work with me, an MSP, a distribution, it doesn't matter who it is, RMM, that's the structure.

[00:03:24] Jason Eberhardt So if they go, why is that person getting a better discount than me?

[00:03:29] Jason Eberhardt And you can hit it. And as long as you lay it out for MSPs and all the MSP channel, they love it.

[00:03:34] Jason Eberhardt They understand it, right? They don't like when they don't understand.

[00:03:38] Jason Eberhardt And as long as you explain yourself, they're on your side.

[00:03:40] Jason Eberhardt Oh, gotcha. Okay. So again, give me a little bit of insight as somebody who thinks this way.

[00:03:44] Jason Eberhardt Yeah.

[00:03:45] Jason Eberhardt We're doing this because a lot of the providers get very frustrated by vendor programs because they don't have insight into the why.

[00:03:49] Jason Eberhardt I knew you'd give me some good insights in it.

[00:03:52] Jason Eberhardt Tell me a little bit of the way you think about the whys of structured pricing.

[00:03:57] Jason Eberhardt Because in a way, it is introducing complexity.

[00:03:59] Jason Eberhardt It is.

[00:04:00] Jason Eberhardt But for a purpose, and your whole point is to make this simple, talk to me a little bit about why and how you structure that.

[00:04:05] Jason Eberhardt The main thing is scalability and giving the discounts to the MSPs that deserve it better than anyone else.

[00:04:09] Jason Eberhardt And that's why I create it, right? Because if we can give discounts to a distribution, why can we not give that to an MSP that wants to go direct?

[00:04:16] Jason Eberhardt To be honest, Dave, I haven't really done direct. Usually, it's through the channel distribution RMM.

[00:04:20] Jason Eberhardt Yeah.

[00:04:20] Jason Eberhardt But with our product and what we're doing, we need to do that. We're going to be launching very soon, right?

[00:04:25] Jason Eberhardt Hopefully, you know, into the year, probably Q1 timeframe. So we need to be able to bring those guys on and then also then bring on the distributions RMM.

[00:04:33] Jason Eberhardt So what I would tell you is a little bit add on to that is, I'm gonna have these conversations with the PAC Saints, Ingrams, TD, anybody you can think of, ConnectWise, Ninjas, all those guys.

[00:04:42] Jason Eberhardt And we're going to figure this out together.

[00:04:43] Jason Eberhardt Okay.

[00:04:43] Jason Eberhardt Because I'm not the kind of guy that walks and goes, this is how we're going to do. That does not work, right?

[00:04:47] Jason Eberhardt Right. This is what I want to do. And they'll come back and go, well, can't do this. And we come to an agreement. Guess what that's called? A partnership.

[00:04:54] Jason Eberhardt Okay. Again, makes a ton of sense. Now, the other one I want to, I knew you'll be a good one to riff on this. I wanted to get a little bit of your sense of this.

[00:05:02] Jason Eberhardt Eberhardt Ecosystems is the buzzword. As I have observed that both ecosystems and marketplaces are synonyms to distribution. And in a way, a marketplace is a subset of distribution.

[00:05:17] Jason Eberhardt Ecosystems If we actually think about it. Putting that aside, I think what we're actually trying to capture with all of those words is the difference between someone who influences a sale versus someone who directly does it.

[00:05:31] Jason Eberhardt Well, we call it sales assist.

[00:05:32] Jason Eberhardt Yes. Okay. So that's what I wanted to ask you is tell me a little bit about how you think about the influencer on a sale versus the deliverer of a sale.

[00:05:41] Jason Eberhardt Yeah. The influencer on a dealer is mostly the sales, right? So we're out there with these conferences. We're in keynotes. We're on amazing podcasts like you.

[00:05:47] Jason Eberhardt Nice to be the site.

[00:05:48] Jason Eberhardt Having those conversations, that's the fun part, right? The back part is where the work really starts, right?

[00:05:52] Jason Eberhardt And I've been in this business, let's just say 20 plus years. I don't want to get too much to start gray coming. I don't want to get into that, right?

[00:05:58] Jason Eberhardt Yeah. But as you get to the business and you go to ecosystems, marketplaces, all those things, and you look at sales assist versus non-sales assist, so we're also going to have a third part where they just go to the marketplace and they just buy it and nobody touches anything and nobody does anything, right?

[00:06:10] Jason Eberhardt Right. That is the MSP channel. If they have no sales assist, no POs, they can go in there, very easy to buy.

[00:06:17] Jason Eberhardt And then they get it. When it comes to sales assist, it gives more complexity to the business because now you have to pay out revenue. You have another person that's involved in the sale. The back end is in the sale. The front end is in the sale and everybody in between is in the sale, right? And that's just too many people, right?

[00:06:31] Jason Eberhardt Right. Okay.

[00:06:32] Jason Eberhardt Go ahead. Did you have-

[00:06:32] Jason Eberhardt No, no, no. I'm listening.

[00:06:33] Jason Eberhardt Yeah, yeah. So when we want to do it, that's traditional channel. That's the sales assist is channel, traditional channel. With MSP, it's monthly. That is where it's all like non-sales assist. We don't want to touch it. We absolutely are going to talk to our

[00:06:47] MSP. So we're going to talk to our MSSPs, all our partnerships, everything. But what we want to do is set up a situation where they can come, buy it, and not have to talk to anybody if they want, if that's what they want to do.

[00:06:56] Jason Eberhardt See, I knew you would give me a bunch of insights that we could teach listeners a little bit to think this way because I think one of the tensions that I always focus on in the relationship between solution providers and vendors is oftentimes they don't understand one or not.

[00:07:09] Jason Eberhardt Right.

[00:07:09] Jason Eberhardt And there's a lot of conversation about vendors that don't understand MSPs, but I actually think there's an important lesson for those MSPs to understand.

[00:07:17] Jason Eberhardt The motivation of their vendors.

[00:07:18] Jason Eberhardt Absolutely.

[00:07:19] Jason Eberhardt If you understand the, right. And you have to spend some time learning this kind of stuff. The other thing I want to want to give you, get a little bit of your insight into, particularly somebody who thinks about this from a selling perspective. Right. Security is a little tough in that. And my two big problems with security is first off, we don't want to sell on fear because it doesn't work. Well, there's a lot of fear.

[00:07:40] Jason Eberhardt There is. I don't use it.

[00:07:42] Jason Eberhardt Yeah.

[00:07:43] Jason Eberhardt Fair, but the, which is where we're going with this. The other half of security is, is that I have never met a security person that even if I gave them infinite money to would actually promise a result.

[00:07:53] Jason Eberhardt I hear that. Okay. I hear that. Is, is I can...

[00:07:57] Jason Eberhardt TNAE or project. I get it.

[00:07:58] Jason Eberhardt Well, I can give a security person infinite money and what they will still come back with is, well, I have done risk mitigation and I have reduced, and it's like, at some point, a business owner is asking me for a business out.

[00:08:10] Jason Eberhardt Yes.

[00:08:11] Jason Eberhardt They are asking me to deliver on that. Tell me how you think about security and the way that conversation should go.

[00:08:19] Jason Eberhardt Yeah, honesty.

[00:08:20] Jason Eberhardt Okay.

[00:08:20] Jason Eberhardt Because literally what you just said is the answer. You cannot completely block it down or shut it down completely unless you unplug it. Right? So you got to make it so difficult for a bad actor to get in there that it's not worth it. That's where it comes down to. And that's why one of the reasons I went to 1Password was the structure, the security structure versus the other 1Password and all those kind of enterprise password managers.

[00:08:40] Jason Eberhardt We all focus on security structure. We have two keys. You break one, you can't get the other one. So it's all about honesty. And again, I know I keep going back to the partnership thing, Dave, but just work it together, right? Don't go into a conversation and be like, this is what I need to do. Hear what the other side has to say because every MSP I talk to, I learn something new. Every single time I talk to them. Every time.

[00:09:01] Jason Eberhardt So give me that. You got to give me the good nugget. You've been down here talking to partners a little bit. What's the one thing you sort of learned from MSPs that surprised you this week?

[00:09:09] Dave Oh, that surprised me. The thing that doesn't surprise me is they want ease of use, a good structure, multi-tenancy outcomes, consumption billing, all that kind of stuff. What has really, really made me understand that the whole industry is changing is people are starting to now go into that whole ecosystem and platform more than they did before. You talked about that earlier in the podcast, right? So that is something that I've been a little bit like, oh my gosh, we're changing because ConnectWise's leadership is changing. Other people's companies are changing, right? And when those things change, change goes down.

[00:09:39] The whole structure of the company, right?

[00:09:41] Dave Right.

[00:09:42] Dave So that's the only thing that is really structure that kind of hit me is like, you look at, even at Kaseya with the K365 thing, right?

[00:09:49] Dave Yeah.

[00:09:49] Dave Everything is coming together like that. And that's hard for vendors like us because now we're on the outside of that. But what I will tell you is, like with Fred at Kaseya or ConnectWise or any of these guys, they still want to work with us. Even if they have their ecosystem, they also have their marketplaces. So we have ways to work all this out together as a team.

[00:10:04] Dave So is there, like, I want to get a little sense and let's not pick on names. Let's talk about strategies, right?

[00:10:10] Dave Sure.

[00:10:10] Dave So there is a very clear movement for some vendors that are thinking about this as a pure play platform where they're going to be a single vendor and approach that way.

[00:10:20] Dave On the other extreme, there is the like, hey, we're going to integrate with everybody and it's all full marketplace.

[00:10:25] Dave And then there's also vendors that are thinking about this from a kind of a bit. They're trying to split the difference, right?

[00:10:31] Dave But what I want to get a little sense is give me a little bit of senses of like the pros and cons from your perspective.

[00:10:38] Dave Yeah, of course.

[00:10:38] Dave As someone trying to get into those platforms, give me a little bit of the pros and cons of the approach.

[00:10:42] Dave Yeah, the pros are really when it comes to MSP is the monthly billing, the easy thing. And what I always like to say to MSPs is you have to win every day with them. Because the difference with structure of yearly contracts versus monthly contracts is the renewal happens every month.

[00:10:55] Dave Right.

[00:10:56] Dave If you have to win every month versus with a yearly contract, you only have to win once a year.

[00:10:59] Dave Right. So one of those things that makes us more connected with our customers, our partners, it makes us have those conversations, it makes us move the whole conversation moving forward. So that's a pro. The con with the ecosystems is you're not always going to get the best of breed when it comes to those ecosystems. And that's not a knock on anyone or any company like you said, right?

[00:11:17] Dave Right.

[00:11:17] Dave It's like sometimes you do maybe the second or third best of breed product because of the price and how it works in your stack. I would say that would be a con because I think I want to offer the best to our MSPs every time we talk to them. And that's the difference.

[00:11:29] Dave But that's why I work at a vendor versus somewhere else.

[00:11:32] Dave And different approaches, right? You've got expertise in this area. So last sort of thought on this, and I've been asking a lot of the people that are thinking about, we're talking in November 2024 timeframe, right? And we're all thinking about 2025.

[00:11:45] Dave What's kind of the one thing that you're watching for from a trends perspective? Like the thing that you're seeing, like that's going to pop or you're interested to see happen that for you is the thing you're tracking for 2025?

[00:11:57] Dave I tell you something that probably no one said is AI.

[00:11:59] Dave Love to.

[00:11:59] Dave No one brought that up, right?

[00:12:00] Dave It's AI.

[00:12:02] Dave It's AI.

[00:12:02] Dave Okay.

[00:12:02] Dave It's all about AI because you're seeing it in products. You're seeing it in people using it to build decks and emails now. You're seeing it in conversations. It's everywhere. And there's not a lot of security around it right now. So that's going to be that next level is okay. AI in your environment is now another user. And you have to control that user. If you don't, they have access to everything. And if somebody gets exploits that user, now they have access to everything. So it's one of those things where I think everyone is looking into that.

[00:12:27] Dave I don't see a lot of companies saying, I mean, spotlight and those kinds of things, but like chat GBT is not something that you get from your company, but you put on your phone. I don't know if you have it, but I use it.

[00:12:36] Dave All the time. Okay. So now you've opened me up for a follow up and I do want to ask you because I want to get your reaction. If you've identified AI as that.

[00:12:42] Dave Yes.

[00:12:43] Dave One of those things, Jeff.

[00:12:44] Dave I want to get your take on my preps and you're an informed person. So I've been thinking a lot about this problem and I would agree with you. AI is one of those technologies that I think is a thing.

[00:12:53] Dave It is.

[00:12:53] Dave I'm dismissive of metaverse or Bitcoin or crypto. Like I looked at those and I said, I couldn't see the business case. Here's one that's similar to cloud or mobile. I can identify use cases. I think the biggest challenge is that we have not focused enough on data governance to be ready for AI. And so I would highlight for me, the 25 opportunity is less AI and more data governance and preparation for AI.

[00:13:20] Dave I love the way you just put that.

[00:13:21] Dave What's your take?

[00:13:22] Dave No, I agree. I completely agree. I think, you know, what I'm thinking about AI is the solution or the plan that's going to happen. What you're talking about is what you need to do to get to that plan. So I still think AI is the thing we need to look at, but I do think we need to always focus on the data governance. We need to make sure that our data is protected. It's all the permissions are all good. Everything is good set up in there. And just real quick, Dave, we just set up a beta that just started in March.

[00:13:46] Dave Okay.

[00:13:46] Dave We had 50 MSP sign up, and they're all working and ready to go. Almost, I would just say, let's say thousands more MSPs are waiting for us to launch. So we're pretty excited about that. So I just want to stick that in. It's pretty exciting stuff.

[00:13:57] Dave Well, then I look forward to catching base with you kind of post-launch into your outlets.

[00:14:01] Dave We need to keep doing this.

[00:14:02] Dave Absolutely. Jason, this has been great fun. Thanks for joining me. Appreciate it.

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