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Monday | September 19, 2016

One Million by One Million Blog | by Sramana Mitra – Domingo came into the market at a time when his original value proposition to enterprises was not that urgent. Over time, however, the mobile security challenge has grown into a critical issue, and now the company is thriving.

Sramana Mitra: Let’s start at the very beginning of your personal journey. Where are you from? Where were you born, raised, and in what kind of background?

Domingo Guerra: I’m originally from Monterey, Mexico. I didn’t move to the US until I was 18. Ever since I was a kid, I always wanted to be an entrepreneur. Monterey is very well-known for some of the largest companies in Mexico. A lot of folks wanted to be soccer players when they grew up, but I wasn’t very good at sports. I wanted to focus on academics and try to do well. I remember a talk when I was a kid where they said, “You need a lot of luck to do well in entrepreneurship. Luck was preparation and opportunity together.” I wanted to pursue both more opportunities and better preparation. So, I moved to the US for college and did engineering.

Sramana Mitra: Where did you do your college?

Domingo Guerra: At UT Austin. I focused on Mechanical Engineering originally. It was something that I could be very hands-on with. I like tinkering and seeing how things worked. It was also very rooted in trying to identify a solution for almost any kind of problem.

Sramana Mitra: What year did you finish UT Austin?

Domingo Guerra: I graduated in 2003. At that time, I started working for Applied Materials down in Austin. I was in the robotics team. Eventually, they moved all of our team to California to the design centre. I had heard of Silicon Valley before but once I lived here, I saw the amount of opportunity and talent around. It’s very common that everyone is passionate about their work. Even after work, they were talking about their projects. You get to learn a lot of new and cool technologies that way.

Sramana Mitra: How long did you stay there?

Domingo Guerra: I spent almost six years in internships and full-time jobs. While I was at Applied, I got a chance to do a Master’s in Engineering at Stanford. I was going to school and completing my work on weekends. It was something where you can take advantage of the opportunity of a large company where they do a portion of the tuition reimbursement. They have the flexible work schedule so you can continue your education and work at the same time.

Sramana Mitra: What year does this bring us up to?

Domingo Guerra: I graduated from Stanford in 2007 with my Master’s in Mechanical Engineering. After some time, I moved over to Brocade Communications. During Brocade, I moved away from just product design and wanted to do more. I realized that even if you have a successful design, it doesn’t necessarily mean that it’s going to be a successful product in the marketplace. You need a lot more than just engineering and design. You need to win at marketing, operations, and a lot of different aspects. I wanted to be able to have more of a say into the success of a product.

I moved over to Brocade to a Product Introduction role. I got to work with not only engineering, but also sales and marketing. I got to build upon my engineering background and also learned some more about the business and strategy around launching a product. I repeated the model they had done at Applied Materials. At night, I went to an MBA program at Santa Clara University. This would have been 2007 through 2011. I spent four years at Brocade and completed my MBA. I already knew how to design products but now I wanted to know how to launch products.

Domingo Guerra: During my MBA, I decided to focus on entrepreneurship. Santa Clara has a very flexible program and you get to pick a lot of the classes and core competencies that you want to focus on. I decided to shadow a lot of the professors there that had entrepreneurship experience. In the last semester of the program, I got to do a market research project for an entrepreneurship class where you basically write a business plan. That’s when I started evaluating the mobility space inside the enterprise. It was something I was passionate about.

We had all transitioned from the Blackberrys that were assigned to us to the iPhone. However, IT wouldn’t support it. Having a technical background, we figured out how to make it work on our own. It wasn’t necessarily the most secure way for the enterprise if they weren’t involved in that process. A good friend of mine, Kevin Watkins, was at McAfee. I started sharing ideas about mobility and explored starting a company. He was still pretty happy at McAfee, so he didn’t want to leave.

I utilized the time during my MBA to write the business plan and interview a lot of potential enterprise customers and get feedback on the market. I thought it was a good opportunity and tried to get Kevin to join me. He still didn’t want to leave McAfee until Intel acquired McAfee and cut a lot of his projects. We quit our jobs in mid-2011 and decided to start a company.

It wasn’t called Appthority at that time. We were focusing on Android anti-malware, because we saw that Android was going to get a big market share and malware was going to be a big problem. We turned out to be a little too early inside the enterprise context. When we started reaching out to prospects and folks we knew in the enterprise space, they said that they were concerned about Android. As a result, they didn’t allow Android in the corporation. It was all iPhones, and we didn’t have an iPhone product.

Sramana Mitra: What was the value proposition to the enterprise?

Domingo Guerra: We wanted to allow the enterprise to deploy Android and be able to look for malware on those devices, which is a product that exists today.

Sramana Mitra: Your’e saying that there was no Android at the enterprises at that time, so your value proposition was moot.

Domingo Guerra: Exactly. We had quit our jobs without any funding. We applied for a big DARPA grant. The Department of Defense had a big research grant for Android malware analysis. We thought we were going to win that grant. We quit our jobs so that we could develop the IP and apply for this grant. We didn’t win the grant. At that point, we decided to just bootstrap. My co-founders and I just started to build the company and technology ourselves for almost a year. It took 11 months before we were able to take financing.

Sramana Mitra: What were you going to do though? Your enterprise market validation was telling you that this is not what the market is looking for. How did pivot your value proposition? Where did you go from there?

Domingo Guerra: We started realizing that it wasn’t just an Android problem. The enterprise is more concerned about iOS. It wasn’t just a malware problem. The enterprise was worried about data leakage and other information that was being siphoned or collected off of these devices. Instead of just throwing away all of the project development we had done, we started adding more functionality to our analysis engine that could already automate the analysis of Android apps. We started working on automating the analysis of iOS apps. We started gathering feedback as to what type of data the enterprise wanted to protect or what kind of risks they were concerned about. We didn’t start from zero.

Sramana Mitra: Who was the first customer that adopted your solution?

Domingo Guerra: We had a lot of initial beta customers. Automotive companies were doing manual testing of apps, and we were helping them automate that. The first paying customer was one of the largest ad networks. When you play a game, for example, you might see a popup suggesting you to download another game. They wanted to make sure that those games didn’t have malware. It was before we had a user interface.

Now we serve the enterprise directly and we have a portal where they can go to. At that time, we only had our engines. It was very rudimentary. It was basically API access where we would grant the customer a way for them to upload or submit applications. Then our engines would review them and reply with a score and a report for the risk on those applications. It was at the very early stages of what our product is today. It was mainly the core of the engine. It allowed us to get some market feedback and to get some folks to actually use the product.

Sramana Mitra: When did you start this kind of a pivot?

Domingo Guerra: As most startups do, you tend to pitch or offer your product to anyone who will listen. We realized that we had an ad network. We had an app store. We have a very fragmented customer base. It was difficult to get feedback that was well-received across the board when your customers are so diverse.

We also saw that the enterprise, in general, was adopting Mobile Device Management to try and secure devices from an email perspective, but those technologies were not really addressing mobile risk from an application layer or from a software layer. We saw an opportunity to go in and partner with the MDMs that would provide the distribution for our technology and provide us with a list of enterprises that are already investing in mobility. That was in early 2013. At that point, we had already raised our Series A. We were ready to be in front of enterprises.

When we started getting close to the enterprise, we started getting way more feedback into the types of risks they were looking for and the way to address those risks. Our product started getting a lot better once we started getting feedback from our actual target market. As a result, we started getting more customers who were reference customers for others in the space, and we were able to collect feedback that would be useful to other enterprises. Even if they were in different verticals, they had the same types of overall risks or risk strategy.


Read the original blog posts on One Million by One Million here.