#087 LimaCharlie Founder and CEO Maxime Lamothe-Brassard: Learn it the Hard Way

Show Notes

Cybersecurity is one of the biggest markets emerging in the tech industry right now. There are several big players, yet there is plenty of room for startups that are being innovative and taking a different approach. LimaCharlie is the latter, creating a SecOps cloud platform that aims to bring together a variety of cybersecurity capabilities in a single platform. In other words, it’s a more simplified approach to cybersecurity in the modern era. 

Naturally, by taking a different approach to things, LimaCharlie ran into some unique challenges during its startup journey. Co-founder and CEO Maxime Lamothe-Brassard joined startup coach Roland Siebelink on the Midstage Startup Momentum Podcast to discuss some of those challenges.

• The danger of working with investors who aren’t aligned with the company’s vision.

• Balancing current investors versus new investors for subsequent funding rounds.

• How to shift toward growth that gives the startup more control.

• The challenge of tech-oriented founders becoming salesmen.

• The shift from inbound-only sales to becoming more outbound.

• How the core values of LimaCharlie have changed as the company has grown.

Transcript

Roland Siebelink: Hello and welcome to the Midstage Startup Momentum Podcast. My name is Roland Siebelink and I'm a coach and ally to many of the fastest growing startups in the world. And today, one of the founders of one of those startups is with us. It's Maxime Lamothe-Brassard, the CEO and founder of LimaCharlie. Hello, Maxime. Thank you for joining. 

Maxime Lamothe-Brassard: I'm very happy to be here. 

Roland Siebelink: Yes, that's good. It’s good to have us both in the same time zone; it makes it a lot easier. Maxime, I got you on the podcast because LimaCharlie is one of the few companies that was able to raise a round recently. Tell us all about that, and then maybe you can also inform us what LimaCharlie does and why were you able to get money where so many other founders are failing? 

Maxime Lamothe-Brassard: Sure. I think maybe it's easier to start with what we do. Clearly, that eliminates a lot of why we were able to do it.

LimaCharlie is in cybersecurity, which obviously is a fairly hot industry. There’s a good amount of activity. We're taking a very different approach to most cybersecurity companies out there. Specifically, the theme of what we do is really around the evolution and maturity of cybersecurity.

Specifically, we had that realization that - general tech went through a big shift in the early 2000s that broadened the cloud age in tech. I won't go into all of the details, but the idea is that this was really driven by an increase in maturity impact, and we're seeing the same kind of shift in cybersecurity. But nobody was taking this cloud approach to cybersecurity - the approach of a cloud provider, which is really different than most vendors. Whereas most vendors in security are - often we will refer to them as a point product, it's a single company built around a single product and the whole thing is behind that. Usually, it has some acronym that was devised by Gartner so that people can understand it more easily. It's very driven in a single direction in that way. 

And what we're finding is that buyers in security are becoming a little bit tired because now they are having to deal with 50, 60, 70 different products over the years that they've had to buy because the industry has just been adding more and more acronyms. You need a - and then enter the acronym. 

The cloud approach is a re-base of that. We're rebasing the industry in that we're saying a lot of those historical products that have existed for a decade are not special anymore. They're becoming a commodity, so in other words, they're not a product or a company. They should be a feature. We're building a cloud provider but for cybersecurity primitives. Those core capabilities. And we're building it like a cloud provider, which has very different types of characteristics than if you're looking at a classic vendor. It's like comparing AWS to IBM. Those two things are very fundamentally different. That's in a nutshell what we're doing. It's a very different approach. 

Roland Siebelink: If I may summarize my understanding, not being a security specialist whatsoever, you're saying it's just like AWS offers all those server-like features - server-less features as they call them these days - in one big package and you can take them as you go. You try and do the same on the security front so that people don't have to install all these separate packages like they used to when they had servers, right?

Maxime Lamothe-Brassard: That's right. We often talk about it in terms of Lego blocks. It's like having a bucket full of Lego blocks, how you assemble them, how you put them together will vary depending on who you are, what you're trying to accomplish. We're taking that exact approach.

Roland Siebelink: Okay, excellent. Very good. So that was enough of a proposition to get VCs to buy in?

Maxime Lamothe-Brassard: Our fundraising history is that in 2019 or 2020 that we raised the pre-seed and then raised the seed about two years ago. And we just raised our Series A. 

Roland Siebelink: Series A. Congratulations. That's a very, very difficult step for many startups to overcome. How easy was it for you guys - if you can disclose? 

Maxime Lamothe-Brassard: It was fairly easy. I don't want to make it sound like it was easy because we have something completely magical.

Roland Siebelink: Still a lot of work is what you're trying to say.

Maxime Lamothe-Brassard: I think really fundamentally the reason that it was fairly easy is that from the very beginning we found investors that we're interested in the vision that we were putting forward. We're taking a pretty different approach. It's a pretty different vision for better and for worse.

And I'm sure we'll get on those thoughts on that topic. 

But it means that the investors that came with us on this journey were buying into this vision very clearly. We've been raising those three rounds - obviously, new people have been coming in - but this latest round was mostly insiders, other than one new outside investor that we brought.

I think it was a little bit easier because we didn’t have to go and start from scratch purely on numbers trying to sell this vision to brand new investors. We were able to go and approach the people that have been with us for a while, they've been seeing the progress. We grew a very nice amount. 2.5 X in the latest round. That's very nice. I think it was just a continuation of that. 

We were questioning for a while because of the fundraising landscape whether we wanted to look for a bridge or how we wanted to play it. And one of our bigger investors, we had that very frank discussion and said, “We're ready to help you raise a Series A; we think you're ready.” And so we ended up just pulling the trigger and doing that. 

Roland Siebelink: Okay, excellent. Some vetted founders might say, “Oh, then you must have left money on the table by going for that preemptive.” This must have crossed your mind, at least. I don't expect you to respond to the conclusion. But how do you kind of look at the balance between just getting the easier money that existing investors offer you versus doing the rounds and seeing if you can get more infusion or a higher valuation or both?

Maxime Lamothe-Brassard: It's a brand new industry, it's really early on in the hype cycle, which investors are truly going to be providing more value, we probably would have been shopping around a lot in that situation. 

Another situation which would be extreme growth. If we'd done 10X in that previous round, you have the metrics to really - makes you think twice about going and really trying to optimize.

Roland Siebelink: You would have been able to get all the partners of the VC firms coming to San Diego to pitch to you, right? 

Maxime Lamothe-Brassard: Pretty much. Very truthfully, if we have been in that situation. I don't know if we would have picked any different investors. I really, really like our investors. And I think that puts us in that other category, which is we had good growth, but more importantly, we had the investors that were really heavily aligned. And because our approach is different, there's one really big danger - which is less and less of an issue as time goes on - but this danger is to find an investor that is misaligned. 

We could have easily found an investor that came to us and looked at our technology and said, “Hey, that one small corner of your technology - for us, it's the EDR, the endpoint detection and response - it's a pretty valuable piece of cyber security technology. Early on, we had investors that were very interested in us. But they looked at us and said, “Hey, you have this EDR technology. You need to be an EDR company. Pivot, this is the one thing you're going to do.” 

Roland Siebelink: Trying to focus on the one crown jewel.

Maxime Lamothe-Brassard: Exactly. And then you get a much crisper communication and a much crisper message. The market already exists. It's already sized. There's all these advantages. 

But for us, given our vision, I would classify that as a danger because there's a much bigger upside and much more interesting upside in saying we will end up being the AWS of cybersecurity in five, 10 years versus we will be one of 200 EDR companies fighting for the same area that's getting commoditized every day.

Roland Siebelink: Basically, what you're illustrating is that even though venture capital is called risk capital, sometimes part of the job they try to do is to actually reduce the risk in their portfolio. You're illustrating here, I think, they're thinking that it's less risky to be one of the 200 EDR companies - even if the upside is limited - than to reinvent the whole category.

Maxime Lamothe-Brassard: That's right. Some investors are a lot more willing to take those risks and that's who we are working with. 

And I think it also comes down to the willingness for an investor to truly analyze fundamentals of the idea. To really go through the thought process that led us to this idea of being a cloud provider for cybersecurity. We didn't pick it randomly, obviously. There's a lot of market dynamics and I think some investors feel a lot safer looking at a spreadsheet, having it all reduced to numbers, and the numbers thumbs up, thumbs down - different types of investors. 

Roland Siebelink: Maybe I can build on that because on the one hand, it's the risk versus reward profile. On the other hand, having been a founder many times myself, I think there's also for you as a founder, what gives me energy versus what's just boring? And that's not just the spreadsheet side of things because we all need spreadsheets God knows. But it's more about what drives you, what gives you energy is partially the reason why you become a founder. What's giving you that dopamine?

Maxime Lamothe-Brassard: Absolutely. I've worked at many different places in the industry. I worked in government and intelligence but also CrowdStrike and Google. The ROI in terms of safety would probably make a lot more sense to be a Googler for the rest of my life. But that’s just not the temperament of my personality.

Roland Siebelink: I wanted to take you through some of the typical questions we like to highlight in illustrating a little bit to our audiences how the company, the product, the role of the founder, et cetera, all changes as you mature as a startup, as you go through raising subsequent rounds of capital.

When you think about your whole go-to-market dimension, a lot of that must have been built up in the last two, three rounds. Looking back, how did you get started and where are you now, and what changed over the years? 

Maxime Lamothe-Brassard: Oh, a lot changed, obviously. We used to be 100% inbound. A piece of context that's going to be helpful here is my background is as an engineer, security engineering, security operations. My co-founder also has experience in early-tech startups and technology and operations. What we did not have was experience in sales and the go-to market.

Early on, we were 100% inbound. We also didn't have marketing, obviously. That was the first side of things that we built up. And when I say, I really mean as a company. It was hiring the right people who knew what they were doing. And we grew this inbound, doing things like we have a podcast and going to conferences and things like that. That is where, still to this day, we've gotten the biggest amount of growth. 

For us, the challenge and the change is in attempting to shift toward a method of growth where you have more control. Let's call it out, it's great to have a lot of inbound growth. The risk with it is that understanding where the levers are is a lot harder. You can't just say, “I made 10 calls and two of them became leads, and then I got a contract.”

We're, I would say, in the middle of that shift toward trying to do more things outbound. Obviously, it's more of a hybrid for us because if you think in your mind about a cloud provider, a big part of that value is assumed to be inbound.

It was really important for us not to lose that side of the company. I would say, in the past six months we've started hiring some folks to be a little bit more outbound in a strategic way. But it's an interesting shift because it was not in our DNA.

Roland Siebelink: Okay. And since you highlighted the background of both you and your co-founder as more technically oriented people, how do you feel in particular about founders having to sell the company themselves in the beginning versus hiring salespeople right from the outset? 

Maxime Lamothe-Brassard: I was going to say I think it's a necessity. If my co-founder had been somebody from sales in that industry, it wouldn't have been a necessity because the experience would have been there. We would have been able to start it earlier. But that being said, I think unless your messaging is really, really, really simple - which I wish ours was - it’s a requirement for the founders to figure it out because nobody else is going to come in with your knowledge of the product, your knowledge of the type of market that you're trying to target.

And if you can’t communicate that, I think it's a non-starter. The longer you wait and the people that you bring in, the further - I don't want to say disconnected because that's a very negative way of saying it - but they're more distant to the fundamental messaging and drive that you are defining in your company. You need to sort it out early so that you can start distilling it and making it simpler to digest for your own people internally, so that the more and more you grow, it remains manageable to keep that growth.

Roland Siebelink: I want to touch on two more points in the few more minutes that we have. One is how far has your company grown and how has the culture evolved in terms of the tone you set? What were some of the key things you were telling early employees versus what you're telling them now to focus on, to keep in mind core values to strive after?

Maxime Lamothe-Brassard: I think that the big change is early on we had to optimize how we hired people for people that really wanted to be there and believe the mission and wanted to build something, wanted to prove something because that's just the name of the game early on in security. 

And I think we very much did that. And now we're entering a phase where we still want some of this, but obviously it’s just the laws of physics. As you hire people, you have trust in the people that you've hired to go and then build under them. For me, that was one of the core things that I wanted to have as we grow is for early employees to feel like they were building the company under them.

I don't mean purely from an organization chart but also from a philosophy, from the way of working. I think it makes all the difference. It makes all the difference pretty much at any point in your career when you have the opportunity to say, “ I have ways that I think and beliefs and I want to build the company that I want to keep working at.”

That was a big thing. Communicating, keeping that message going is a challenge. It's the first time that I lived that challenge, very candidly. I've led teams in the past, but we've reached the point where the team is bigger than anything that I've led before. I think we're learning through this. That's been my whole career - learning the hard way. When you learn something the hard way, you truly learn it versus having an influencer telling you the top five things that you should be worried about.

Roland Siebelink: Yeah. YouTube learning as opposed to real learning. 

You're talking about your own journey learning as a leader. It sounds like you have so much potential that there'll still be a lot of learning ahead there as well.  But what changes have you already noted in your own style, what you focus on, your own behavior or how you calibrate, how you operate as a leader in your company?

Maxime Lamothe-Brassard: That's changed quite a bit for me. As I mentioned, because I'm an engineer, it means that historically in the company I've been very, very heavily involved in engineering and I still am. But the big change truly is for me to start replacing myself fully on that side of things. It's a very new type of challenge. But I'm also very excited by it because at the end of the day, I do believe that learning is learning - just different types of challenges at a different point in your career. 

I think the pitfall or the big danger that I've always tried hard to avoid - and I'm sure I've done good and not so good at different times - is if you're very comfortable with engineering, for example, in my case, it's very easy to focus on engineering problems. At the end of the day, the product is very important. But I think the rest of it is 80%. Finding the right way to message it to people. Going and promoting the idea, so going to talk to different people about it. Teaching people that may not be thinking about it, thinking about where we want to promote it. Who are the right type of customers for us and who are not? I think all of these things - it can be easy sometimes to revert to the thing that you're most comfortable with. For me, that's been the biggest change, forcing myself to go in and trying to think in terms of what's the messaging behind these events that we're doing? As an engineer, it’s a super weird thing.

Roland Siebelink: Exactly. Okay. Very good. Well, we've gone over time already because this was so interesting. Is there any last message you would want to share with our audience, those that have made it all the way to the end here?

Maxime Lamothe-Brassard: Thanks for listening. I'm always happy to talk to folks if you're thinking of starting a company - you're starting a company and you just want to bounce ideas or thoughts. Anything like that I try to be as open to everybody as everybody that's helped me along the way, so don't hesitate. 

Roland Siebelink: Okay, excellent. And of course, we'll put your contact info to the degree you're comfortable in the show notes. And also any listener that knows me, I can introduce you to Maxime. Just to be in touch with me or with him directly. 

Thank you very much, Maxime Lamothe-Brassard, celebrating your Series A for LimaCharlie. An amazing accomplishment and thank you for a thoughtful interview.