Teleport
Ev Kontsevoy had already built Mailgun (which sold to Rackspace) and founded Gravitational, a company doing $4M ARR. Teleport started as an open source side project—specifically a free component designed as a lead magnet to drive demand for Gravity's core product. But something unexpected happened: customers started calling his cell phone, begging to pay for Teleport instead. The market was signaling that the free tool was more valuable than the flagship product.
Teleport was built as an infrastructure identity platform addressing a real pain point in the market. The open source approach was intentional—public code audits and community reviews gave Teleport credibility that closed-source competitors could never match. For a security product, transparent code became a powerful differentiator and trust builder.
The first enterprise deal came from an improvised cold call. Ev was negotiating pricing and accidentally said "thousand" instead of "hundred" per year—and the customer accepted at $25,000/year. Rather than backing down, he built the enterprise product around the real customer requests that followed, validating that premium pricing was viable.
The breakthrough came when Ev asked customers to describe Teleport back to him and discovered they were using only a tiny fraction of the product. This revealed a critical buyer persona mismatch—they'd been selling to engineers when VPs of platform engineering were the real decision-makers. Shifting the sales motion to match VP expectations nearly tripled average deal size. Meanwhile, COVID killed Gravity's pipeline in 2020 while simultaneously accelerating Teleport demand, making the priority shift undeniable. Ev focused by stopping four of five things Gravitational was doing, concentrating entirely on Teleport, which was already generating equal revenue with fewer engineers.
Teleport now serves 500+ customers with 8-figure ARR (roughly $8M+). The company is seeing AI agent identity emerge as a major growth driver as enterprises adapt to securing AI workloads. The open source SaaS model that started as a lead magnet became the company's true north star.
- •Free open source lead magnets can reveal your real product if you listen to market signals—Teleport succeeded because Ev paid attention when customers wanted to pay for it rather than the flagship product.
- •Buyer persona misalignment was silently capping growth; discovering that VPs, not engineers, made the buying decisions unlocked a 3x multiplier on deal size.
- •Open source transparency in security creates asymmetric trust compared to closed-source competitors, giving a natural moat that compounds as the community grows.
- •COVID accelerated existing demand trends rather than creating new ones—Teleport's spike revealed it was solving a problem the market urgently needed, not a solution looking for a problem.
- •Focus through subtraction (stopping 80% of activity to triple down on what works) can generate more revenue with fewer resources than trying to scale a portfolio.
- 1.Build a free open source version of your product as a lead magnet, but instrument it to track which features customers actually use and which they request—let customer behavior tell you what your real product is.
- 2.Conduct interviews asking customers to describe your product back to you; misalignment between what you think you're selling and what they think they're buying is a hidden growth lever.
- 3.Identify the economic buyer (VP-level) versus the technical user (engineer) and tailor your sales process, messaging, and pricing to the person who approves budgets.
- 4.For security and trust-sensitive categories, publish your code and actively court community audits and contributions—transparency becomes a defensible competitive advantage.
- 5.When you discover a product doing $4M ARR and another doing $4M ARR with fewer resources, kill everything else and concentrate on the growth vector that's already winning.
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