COVID-19’s Impact on Cybersecurity Marketing

Steve King: [00:13]

Good day, everyone. I’m Steve King, the director of cybersecurity advisory services here at CyberTheory and today’s podcast episode will explore the current challenges in cybersecurity marketing as we enter our third full year of worldwide COVID-19 impacts accompanied by a global recession now, an unpredictable war using a weaponized cyber warfare for the first time -that we’re aware of anyway – in Russia. And then amid our usual warnings from venture capitalists that there won’t be any new funding rounds, so don’t knock on our door. Joining me today is Gily Netzer, the CMO of Perimeter 81, and one of my favorite people on the planet. Gily is a passionate, innovative and results-driven marketing strategist and a veteran leader with about 20 years of international B2B cybersecurity experience. Gily brings great leadership to cybersecurity companies. She has built teams across multiple regions internationally, established new technology categories, built marketing machines, provided leadership and relationship management that regularly drives 50% plus consistent year-over-year growth. And her past experience includes marketing leadership roles and places like simulate elusive networks and large brands, including Symantec. She’s a contributor to publications such as Forbes, she’s the mother to three teenagers, and she serves in an F-15 Fighter Squadron. So welcome, Gily. I’m glad you could join us today.

Gily Netzer: [02:04] 

Thank you. Hi, Steve.

Steve King: [02:06]

Hi. Let’s dive in here. If I’m not mistaken, you guys just closed on $100 million seed round earlier this month with a billion dollar valuation. I think that’s known as a unicorn. How does that feel? And what was it that you think – I think B Capital and Insight were the leaders in the investment round, and the other investors – what was it that they saw on you that gave them that level of confidence because after all, if you look back to early June that was about three weeks ago, we knew we’re headed in these headwinds, and they could oppose the funding at any time.

Gily Netzer: [02:49]

Right. So first, it’s great to be here. And thank you for inviting me. You asked a few questions about this round, it’s a very exciting time for us not because we became a unicorn, but because the market is so busy, there’s so many things going on. And for us, this is the means to continue moving forward. Basically, both the Capital and Insight developed a long-lasting relationship with us. They learned the team, the product, the customers, the market tailwinds very deeply. It wasn’t like an accelerated investment timeline, but rather a planned round that was built over time and takes into consideration a profound installed base of almost 2500 customers now. So the increasingly dangerous threat landscape has heightened demand for cybersecurity solutions. Also the rise of remote work and cloud adoption, Fiber and 5G, has created a fundamental shift in the network security landscape leading companies to replace their on-premises network and security appliances with secure corporate network over the internet, and B Capital and other investors embrace our vision to deliver a holistic security that is purpose-built for a cloud-first distributed workforce and they share our belief that secure corporate network over the internet transcends the traditional office environment and is the way to the future. We basically radically simplify network security for the modern hybrid work for us as an SSE leader, secure service edge, with a platform that enforces a zero trust architecture. And these, by the way, have become a federal strategy in the US, following President Biden’s Executive order on improving the nation’s cybersecurity. So, a work to radically simplify network security is not completed. These new funding will allow us to continue and remain committed to helping companies worldwide secure all of the networks and users in an agile and cost-effective and scalable way. So again, this has been a process. It’s not something that just happened.

Steve King: [05:00]

Sure. And you guys have been cloud-native from the get go. You’ve been named Forrester’s ZTNA New Wave leader. And you just indicated you’ve got 2500 or so customers and lots of 250 employees across three global offices. I saw your direction, you said that your future duration is in line with the secure service edge rather than the SASE sort of direction. And that might be a reason for your success. Can you expand on that a little bit in terms of future product direction?

Gily Netzer: [05:41]

For sure. So, we know that the internet is the new corporate network and that it will become only stronger. In the next five to 10 years, all companies will move their corporate networks from an on-premises and physical security appliances to a secure corporate network that is completely driven by software as a service over the internet. We built a platform that has a single management console, a single agent that is installed on all the managed devices of an organization and a single edge network that we manage. This allows us to basically offer and build the ultimate network security solution that is delivered as a SaaS solution over the internet. And the fact that we have almost 2500 customers gives us more than 2500 PoVs and clear understanding of how should we steer the product. We work closely with our customers to prioritize the work. And we will continue to add more use cases and solutions to support the ultimate security corporate over the internet, which we are currently working on, like cloud access security broker, user behavior and more. And once you have a platform and the edge network backbone, it becomes a software play, and we listen to our customers, and reiterating the product accordingly.

Steve King: [07:04]

Yeah. And that ZTNA space is getting crowded these days. It’s cool that you were named in – look at the Forrester chart. I think you’re in there with what Zscaler and two or three other leaders in that space. You’re congratulated for such an early accomplishment I think in that category. Congrats for that. The question that I’m always curious about these days, because of the Sequoia Black Swan Memo and their continual negative approach to marketing and marketing spend, is around the marketing spend pace. I will assume that you’ve been advised to slow down marketing spend, maybe not. But Perimeter 81 has achieved some tremendous traction over the last 12 months with your current business model. Can you tell our audience how much of a role that maybe zero trust has played in your success? How much it might play in the future? And is that zero trust part of your marketing strategy, going forward? And are you going to continue to spend at the same pace that you have been spending in terms of marketing?

Gily Netzer: [08:33]

Okay, so great question. So, people often mix different names and terms and technologies and methodologies and product names, so SASE, SSE and zero trust and all of that. So, zero trust is a methodology. It’s not a product, it refers more to the remote access base, which was very relevant during the COVID-19 era. We do see this developing into something bigger. As mentioned, we call it secure corporate network over the internet, which zero trust is only one pillar of. There is an internet security component and much more to it. Everyone is looking to replace their VPN and the zero-trust-based technology is what it is. It’s more secure, it’s easy to use, it fits for today’s hybrid, works for us and it allows user-centric policies. So yeah, definitely zero trust methodology is in the heart of what we’re doing and we continue to play this game in the future.

Steve King: [09:34]

But the product itself – you’re not rolling out a zero trust version of your product. It’s your product that assumes some of the foundational principles of zero trust.

Gily Netzer: [09:47]

Exactly.

Steve King: [09:48]

Yeah. So, talk to me about your typical customers and how you’ve been reaching them. From a marketing point of view, a lot of our audience are in marketing right now and many of those folks are frustrated by this tightened market here. You know equally or better than I do about how tough it is to get your signal through the noise these days with what we’ve got almost 5000 participants, vendors in the marketplace, and have you been successful in getting your message out? And then, what are your plans for continuing that outreach over the next six months or so?

Gily Netzer: [10:35]

So, our typical customer of the mid-market, more of the small-medium enterprises, everybody has a different definition to it. So I’ll say it’s between 50 to 5000 employees, customers, which we gained great success with. They are more modern and quick to deploy and they use and allow us to work closely with them to build a better product. I guess some other vendors or competitors that are more in the SASE market, where SASE has the security components, but also a network component, those typically start from the very top-right from the Fortune 5000 or Fortune 2000s that are more the traditional bigger companies who also rely heavily on SD-WAN. This is not where we play, we play it the 50 to 5000 employees, very much of a hybrid company working combination of on-premises and in the cloud. And like I said, they’re very modern, quick to deploy news and so on. Eventually, small customers are paying for the product and they expect the service to be free. The bigger customers that the enterprises are paying for the service, and they expect the product to be free. With the midsize customers that we are targeting, they buy both the product and the service. And this is where we excel.

Steve King: [12:05]

Yeah, it sounds to me like there is an intense service component to your offering. How many people do you have on the service side?

Gily Netzer: [12:17]

Well, it’s like the platform itself is self-managed, basically. But if we are talking about the very small companies and if they don’t have the resources to run the platform on their own, they can always work with an MSP or an MSSP who would give them that service.

Steve King: [12:39]

Okay. So, you have partner network and MDR, server MSSPs or ISPs. So, I don’t think we got to from a campaign strategy and tactics point of view here. What have you found that works for you in terms of outreach? And what doesn’t? We’ve got marketing folks in the audience that are dying for some insight about how they’re going to get their message out and where they should spend their money, what little they may have?

Gily Netzer: [13:20]

Yes. So, of course, that’s the tricky question that everybody wants to know. I don’t know that it’s the same for everybody but I recommend to invest in intent-driven demand generation programs, whether through paid search or media outlets, will provide intense data-powered solutions. And these two can be tricky if you are a startup in a whole new category, the search volume will be low. And those categories still may not exist in all the media outlets. So, even if you wanted to do the intent, sometimes it’s still low or not possible until you create enough education and the category is starting to ramp up. And the second part to invest in intent is how people talk about product market fit. So I like to talk about this search ad content fit. Some people invest a lot in paid and in intent and in advertising. But there is a disconnect or sometimes they’re not optimized campaign when the search keywords and the ad and the content don’t all sit together. I often see vendors and marketing professionals launch a campaign where the defined keywords don’t align with the ad copy with the CTA with the landing page copy and the content, and this will result in low conversions. So, this is something that needs to be optimized. Also, investing in SEO on page and off page in A/B testing is also key because once you’ve created the education and traffic or interest, you want to make sure that you come out on top in terms of the search results. And I’ve been to startups that have not invested in A/B testing. It’s easy to do. There are a lot of platforms today for it. And you can test almost everything. So, you can direct half of the traffic this way and other half the other way, you can test many different subject lines, you can test different call to actions, different patterns. And this is something I recommend to do in order to optimize your campaigns. And one last thing I want to talk about is that these events are about brand awareness and demand generation, direct and through channels and affiliates, pipeline acceleration, cross-sell and upsell, and media relations. So events, at least in my opinion, gives you a whole lot of value. And from my experience in the past, especially if you sell to the enterprise segment, events used to bring 30% of ARR. With COVID-19, everyone went digital and it’s gotten more difficult to raise above the noise because if people before invested some in digital summit events, throughout the last two years, they’ve been all digital. And even now that events are coming back with all the bells and whistles, for example, RSA, attendance won’t be as high as it used to be. So, we also need to address people who don’t physically attend but are interested. And we have to go virtual too and the whole thing of being physical and virtual together to catch on everybody, this will cause events budget to raise again, but I do think that it is worth it. Talking about virtual events, they don’t have the same impact as face-to-face, not in terms of not being personal, not getting out of the office, not mingling and enjoying like personal relationship, it has much fewer leads and traction, unless you’re a speaker, but not everybody is traveling so it will generate broader audience reach and improve speaker accessibility. Imagine that speakers need to travel less, so they’re more available to being a speaker. And the big issue is that you need both of them right now. And it’s a lot of resources, whether it’s the production costs, the host or the speakers, the moderators, you want to have one online and one on-site, the marketing technologies you have to deploy in order to have the virtual events, and double spaces and recordings with studios, and so on. So, to sum up, we have to be competitive and all this stuff. And I suggest to consider going both virtual and physical on the events and test it out.

Steve King: [17:42]

What did you think about RSA this year?

Gily Netzer: [17:49]

Yeah. So I went in person. It was nice to get out after a long time. Before RSA, on one of the CISO groups, someone was asking who’s going to attend RSA in San Francisco in June, and she had almost 200 people voting on the poll. And 46% said they’re not going to go, 23% said they haven’t decided, and 11% said they will attend virtually and only 20% said they’re going to attend in person. When I was there, traffic was much less than in the past. And I heard, but I’m not sure it’s correct, that they had 25,000 people attending in the past, I think it was more like 40,000. So I did feel less traffic throughout the days. We had a very good show either way, but it wasn’t like previous years. And then, by the way, we did also go virtual. So, we invested in a virtual activity during RSA to address that audience who chose not to go.

Steve King: [18:58]

And use what stream there?

Gily Netzer: [19:00]

Yeah, so we had a side event that was a full day, we had people coming into that side event throughout the day for a number of panels and networking and food and some giveaways. But in parallel, we were streaming. We were streaming the panels and such and the talks. And we had people who registered in advance to the physical versus the virtual and we had attendance in both.

Steve King: [19:26]

So, you had some measurable experience.

Gily Netzer: [19:29]

Yeah, measurable. We got a few hundred of the leads, I’m talking just about that side event, both physical and virtual. And probably the registration was 50-50.

Steve King: [19:44]

So, the RSA is divested itself of that conference and I guess it is now owned by a private equity firm and it’s not clear how they’re going to do that next year. Regardless, you place a lot of value in both the event itself, both virtually as well, as you think that it’s important to participate physically. Is that my read?

Gily Netzer: [20:17]

At least for now, I think people are eager to meet back face-to-face and at least from my personal experience, it’s the interlocking, the relationship building that you can make and we’re in a physical event that’s a whole lot different than what I’ve experienced in virtual activities throughout the two years of COVID-19. So, I’m all for a combination and not going just for events or just for digital and just for virtual. I think that different people like different ways of communication, and I’m trying to cater into that.

Steve King: [20:57]

Okay. Help me with the future here. Maybe a final question because I’m conscious of our time together. So, I think you know there are 4000-5000 different vendors all selling similar products across all these categories right now. What’s the evolution of the product roadmap from Perimeter 81’s point of view and what are the specific things that it will take you guys, or any company, to become a winner?

Gily Netzer: [21:38]

I will not presume to predict the future, but similar to other technology categories, even like marketing technologies, there are also 5000 vendors, there will naturally be consolidation and some things are probably not meant to be, or too early and less of them must have other barriers. There are not several categories, but many categories. And most of them out there are to solving to different needs. Indeed, some overlap. Indeed, within a category, you will find few vendors offering similar things, but each one emphasizes and focuses on a different benefit or micro needs. The customers will often need to decide if they favor price over quality or simplicity over complexity, a one-stop shop to a more specialized or tailor-made and so on, as sometimes they will even prioritize relationship or prioritizing a good customer success team, so they will get ongoing support. So, as a vendor, you always need to revisit where you are in terms of product market fit and how you’re positioned in the competitive landscape versus the challenges of your prospects when you determine your roadmap and look forward. Some things vendors do to determine how they win are they speak to the customers and ask, “Does your roadmap address the customer needs?” They speak to the integrators and to the resellers and the MSPs. They speak to analysts and they ask stuff like, “Does your roadmap match the Gartner categories, do you mix between categories to point solutions and frameworks?” Many times happens, like SSE versus SASE versus zero trust, which was mentioned before. Usually, no vendor really solves into a full framework. So, it may be that the two vendors work by framework but they fit into different categories and that’s okay. So, these are some of the things to consider. And you need to think how your roadmap and how the choices you make will differentiate you from the rest of the competition. We usually listen in, we analyze and we listen in to what is missing in the offering of what exists in the market, and we try to tap into that.

Steve King: [24:05]

The other part of that question is that a lot of companies have figured out one sort of thing that works for them well in the case of brand authority, for example, and you mentioned brand authority being a key driver in your mind tied to participation and events. In other words, you show up at an event that communicates your brand authority and if you’re not at an event, conspicuous by your absence, people start wondering where Perimeter 81 is and whatever happened to them, and that’s not a good thing. Is there one thing that you guys have done and will continue to do to differentiate yourselves, going forward, just from a pure brand authority point of view?

Gily Netzer: [24:58]

It’s hard to choose one, honestly. There are a few things. It starts from the messaging. We tried to be consistent with our added value and if our added value is being radically simple, because we figured out that, if it’s not simple, companies will not deploy it, and they will not use it. So, for me, simplicity equals security. And that’s why we go with the messaging of radically simplify your network security. So I guess the messaging is one. The other is maybe your culture and your identity wanting it to come out in how you approach the market on your marketing. I just walked on the RSA floor and I noticed that maybe just one or two other vendors in addition to us actually had the theme in their booths, most of them had the standard booth. You can see their brand, you can see a reception, you can see demo stations, but there was no theme. And I think that people today take decisions with hearts and minds together. And it’s very important, at least to me to do our B2B marketing in a B2H way- business to humans. So, to me, delivering experiences through events, through digital marketing, for example, we recently launched an ABX campaign. So, we have a theme going with it, because we want it to be different, we want it to look different, we want it to be heard in a different way, because otherwise it will not rise above the noise. So that all ties back into brand authority. You want to be different. You want to raise above the noise. And that is part of who you are. Part of your culture and how you talk to people, not to businesses, we talk to people: business to human.

Steve King: [26:54]

Exactly. Thank you. All right. Listen, thank you again, Gily, for taking time out of your schedule to join us today. It was great. It’s always great talking with you. And mega congratulations on your success. Very few folks have achieved what you’ve achieved and both individually and as a company. So, thank you again, and maybe we can get back together in a few months and revisit and see where things are.

Gily Netzer: [27:32]

Wonderful. Thank you so much.

Steve King: [27:34]

All right. Take care.

Gily Netzer: [27:35]

Thank you. You too.

Steve King: [27:37]

Bye bye.