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The Man Who Left Salesforce.com To Build A $600 Million Startup Takes It Personally When Employees Leave His Own Company

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When Todd McKinnon first joined Salesforce.com in 2003, his engineering team had 15 people. By 2009, it had grown to 250 engineers.

McKinnon loved his Salesforce job. He was senior VP of engineering, and was considered one of the proteges of Salesforce.com CEO Marc Benioff.

But McKinnon saw a huge business opportunity in cloud password management that he couldn’t pass up. It was an idea he knew was going to blow up, and he didn’t want to be that guy sitting there and watching it happen.

So in 2009, McKinnon left Salesforce.com to launch his own startup called Okta, a cloud-based software provider that manages user accounts and login for Web applications.

Benioff apparently didn’t like it. When McKinnon asked him to be an angel investor, Benioff turned him down. There was a lot of tension around Salesforce engineers, as some of them would later join him at Okta.





But it didn’t take long for McKinnon to find other investors. Andreessen Horowitz was one of its early investors, and made its first cloud investment in Okta. So far, Okta has raised $155 million from top VCs such as Sequoia Capital, Greylock Partners, and Khosla Ventures. It is now valued at roughly $600 million.

More than 1,500 companies use Okta’s service now, and sales have grown 200% over the past year. Although McKinnon declined to disclose actual sales figures, he said Okta is on track to turn profitable by next year, a feat a lot of cloud software companies struggle to achieve.

Okta’s massive growth has actually spurred some of the big companies, including Salesforce and Microsoft, to create similar products. “We defined this market, but now we have to keep it on the cutting edge because Microsoft and Salesforce released copycat products,” McKinnon told Business Insider. “In a way, these big companies are really validating what we’ve created.”

When asked about his relationship with Benioff, McKinnon said they’re on good terms. In fact, now that he’s running his own company, McKinnon says he’s come to understand Benioff better.

“I didn’t understand it as much at the time as I do now, but founding a company and being the CEO is very personal. You take it personally when people leave,” McKinnon said. “I take it personally when people leave Okta, and I’m sure Marc felt the same way, to some degree with me.”





But McKinnon reiterated he’s never been in a bad relationship with Benioff. If anything, it’s just their competitive nature. “Marc’s passionate about what he’s doing,” McKinnon said. “But competition is very motivating for us, it just fires us up. And we want to win. We want to be the top player in this space.”

When Okta raised $75 million in June, McKinnon said it would be its last funding before going public. With a proven business model that’s generating recurring revenue, Okta may not be too far away from going public, although McKinnon said it would not happen “in the next year.”

Going public is a complicated process, and with millions of dollars in the bank, McKinnon seems more focused on far bigger goals than an IPO. It’s about killing the password at the workplace. “You can have a crappy experience with 60 different passwords, or we can give you a good experience with one,” he said. “It’s an outdated way of doing things. Passwords really need to die now.”

H/T: Business Insider





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