Detectify

Detectify began with a group of security specialists who were also white hat hackers working on responsible disclosure. Richard Carlson explains that his co-founders, some of the world's best white hat hackers, had found bugs in companies like Google, Facebook and Dropbox. As they automated more of their own work to make their lives easier, they realized that they, as young people, were building better tools than the billion-dollar corporations they were testing. That realization in 2012 led them to think about building a company around it.

Carlson joined later, after the first lines of code were written in 2012. Company building started around late 2014. He describes the product as having a substantial technology stack rather than a thin interface on top of someone else's technology, which he says took considerable time to develop. Carlson, who had worked as a business consultant at McKinsey focused on IT strategy and security, left the consultancy partly because he believed security would become increasingly important and wanted to learn it by working in a small organization.

The company raised about two and a half million euros in a priced equity round. Carlson, the CEO, handled the fundraising and sales. He said he took 15 to 20 meetings with investors. The turning point was getting angel investors on board, including the founder of F-Secure, which he said led to further conversations.

Detectify grew largely through content marketing and organic methods. Carlson said the company had no paid acquisition, and that two outbound salespeople had only been in place for about three months when the interview was recorded. Its strategy was to integrate security testing into the development workflow so that security knowledge spreads beyond a small central team. Pipedrive was cited as an example of a customer that uses Detectify to automate a large part of its security testing.

The company's most reliable traction came from a long tail of individual users paying around 67 to 80 euros a month. Gross customer churn was about 2% per month. The company was also moving upmarket, with enterprise contracts starting around 10,000 euros a year on annual upfront payment. The host noted that the team of about 25 people, roughly two-thirds of them full-time engineers, appeared to be burning cash relative to revenue. Carlson acknowledged that salaries in Stockholm are lower than in Silicon Valley but did not dispute the cost structure.

At the time of the interview, Detectify had about 350 customers and was generating roughly 28,000 per month, which the host described as about 30,000 per month. The source does not clearly state the currency, though the customer pricing is given in euros. The company was planning to move offices, and it was building out its enterprise sales motion while continuing to serve the long tail of individual users.