CrowdStrike

“Palo Alto Networks, Over the past year is up a 121%. It's a three hundred and twenty billion dollar company. Crowdstrikes, a two hundred and thirty billion dollar company, up a 107% this year over the past 12 months.”

“When Mythos first came out, I think the stock market thought that Mythos was going to kill a bunch of our security companies. Just look at CrowdStrike's stock price over the last six weeks. It actually is such a tailwind behind a lot of these companies, especi…”

“You have, I mean, Palo Alto, CrowdStrike, Cloudflare, Datadog, Palantir, all these companies trade above 15 times NTM revenue again.”

“And over the course of my time at Section one 32, we've had six funds. We've invested in companies like CrowdStrike and Cohere and Coinbase and all six of those funds have averaged about four hundred million in size, and all are performing in their top decile,…”

“So I think there'll be a ton of fast acquisitions as agent security solutions emerge, you know, and people will be doing, if they're smart, and I think those two companies are extraordinarily smart, they'll be doing acquisitions long before it's quote certain …”

“Slight deacceleration, 27 to guidance of 23, 27% revenue growth, guidance of 23, they'll probably beat that by two.”

“The example I would point to is, you know, CrowdStrike. Samir Gandhi and John Locke intersected CrowdStrike when it was, you know, there was like a million dollars of software revenue and there was a nine million dollar consulting business, and like, that was …”

“It's 22% revenue growth projected, 31% cash margins, and it was trading at 16 X revenues on Friday after the first hit.”

“I don't think CrowdStrike's obviated by this. I think it will totally be fine. It'll continue to be a business.”

“Believe it or not, Mandiant was actually an endpoint company. I just executed so poorly on that dream. Nobody knows it, you know, but we were building an endpoint to detect what Symantec and McAfee missed... And since that time George Kurtz and CrowdStrike kin…”

“You're minting new adversaries because you don't have to have all the knowledge that you had to have in the past. You can ask any number of LLMs and you can get answers back. So what's happened is the attack timeline has been compressed. You can automate all o…”

“What we're seeing now is prompt only autonomous malware, meaning I can drop the prompt on your computer by a variety of means, and then it will autonomously interact with an LLM, and it will give a unique fingerprint every time it runs.”

“Now these can run autonomously whatever, without ever phoning home.”

“Well, it, it's hard to find these guys, but any event we found 40 of them. We were right. 40 of them. That, that's for the first run. We found hundreds now over.”

“We don't have operations there. We don't have any revenue. We don't sell them to China. Never have. From the start of the company.”

“So their whole job is to open a ticket, solve a problem, close a ticket. So if you follow the money and the incentives, you can see why there's a problem and people want to be helpful at the help desk and hence they get into the situation.”

“We, well, we have our small language models, and we do work with just about all of the large language models. But we've built our own guardrails around what gets shared, how it gets shared, and how we process any of the data back.”

“My Pekumumusukus, Pekumumusukus, Palantir, Cloudflare, Mongo, Shopify, CrowdStrike, Snowflake, I'll bet you 10 grand, three of them are in the top six of this cohort at the end of next year.”

“We had three companies in the last 14 months enter the S&P 500. CrowdStrike, Datadog, and Coinbase.”

“We didn't think when we backed CrowdStrike, you know, our entry price was three billion in the big round that we did. We co-led that round.”

“And so I reached out to Andrew. I was like, can you help me here? And then that day I was on the phone with the president of CrowdStrike.”

“So CrowdStrike has recently talked about How they had one of their customers I think it was the CEO, but an executive at one of their customers actually impersonated in this credible way and, you know, go ask employees that I think over video to go do somethin…”

“They've continued on a very high growth rate through 20 24 and have been growing at a 50%, almost a 50% ARR growth CAGR since going public in 2019, and they're approaching four billion dollars.”

“AI, Is gonna be a direct beneficiary for cyber. Call it second, third derivative. That's just gonna add CyberArk, Paolo, Zscaler, CrowdStrike, Okta, others.”

“I was actually at one of those McAfee and we realized well, at McAfee that these companies were just incapable of innovation. They were born in the 19 eighties you know got very successful, but also stagnated and there was no innovation. They became public com…”

“Essentially a faulty update got released. Unfortunately to The entire population of their customers and a huge percentage of them got impacted, and it went into a perpetual blue screen mode on Windows, where basically it crashes the system, you reboot, it cra…”

“Shares are down 25% since Friday, so that represents twenty-four billion dollars in market cap.”

“Similarly, I had my IT department check and make sure that we didn't have it running anywhere. We don't. I'm just gonna be frank. I don't trust this company.”

“And so I think when you think about, there's a whole story about open versus closed, distributed power, distributed risk versus centralized risk. But it is funny that this week we had the Zuckerberg letter in Lama three talking about, let's make sure we decent…”

“Like, if you did Increasingly large groups every two hours. You wouldn't have never had this impact on the world.”

“Amazing, growing 33% at almost four billion in revenue.”

“Because the amount of energy and time it takes to deploy CrowdStrike is so huge that it would take three to five years to churn out for real, ok? You have to test Sentinel one or whatever you're going to do in a small group. You have to do it on stage and you …”

“So I think almost upsells are going to have to go on hold for like, you know, three quarters.”

“It's, it has, it is a service and we'll give them one pass. I don't think it will bring them down.”

“I'm going to guess it bridges 50% of the gap. So was it a hundred? Today it's at 66. So I'm going to guess it makes back 17%, half of that. So what does that bring us up to 80? 83? I'll go 83.”

“I mean, I bought when it was at 74.”

“So I would go I'm gonna go for 75. I don't think it'll take such a rebound. I don't think it's gonna take such a rebound, but I think legals and fines are gonna be real, and I think it's gonna be an interesting enough story. It's touched enough consumer lives …”

“The legal and fines, you take a reserve, and the truth is it doesn't really matter because it's not a forward impact. It doesn't really tell you where CrowdStrike's gonna be in five years, so the markets usually shrug it off, even though Again, it's a lot of d…”

“And you see some of the most successful public companies today, the crowd strikes of the world, the data dogs of the world, right? And it's exactly what you just said. It's moving from a point solution to a platform. Like that's really hard.”

“And one thing I would tell any entrepreneur Is you better be focused. If you want to disrupt an industry, if you want to win in the space, you can't be a you can't have lots of different products doing lots of different things. You can do that when you become …”

“There's probably 30 security companies using code 42 today, and they're the big names in this space. It's people like CrowdStrike, and Okta, and Ping, and RapidSeb, and Splunk, and Cisco, and so it's, we have really, really good customers.”

“You look at what CrowdStrike is valued at, it's valued on current ARR at 12 times. And you look at a forward number that's nine and a half times.”

“CrowdStrike is the fastest growing cloud software company ever.”

“And then if you're lucky enough to find a good company every couple years, like a CrowdStrike, and you really figure that out, and you gotta back up the bus, because you're not, those don't come along every month. I don't think there's that many great opportun…”

“I focused on getting the top 20 people wherever they were in the world, and we didn't really care about having them in an office. And we really, I would say, pioneered a lot of, pioneered, maybe that's the wrong word, but we were ahead of the curve in terms of…”

“I became an entrepreneur in residence at Warburg Pincus, got basically crown track off the ground, and wrote 25 slides, got twenty-five million bucks.”

“I probably would have took out as many loans as I could have and put as much money of my own money in the deal as early as possible.”

“When we IPO'd, we were the largest security company at the time when we IPO'd.”

“I think we were the third fastest growth company to ever IPO behind like Zoom and Salesforce.”

“When I recruited my CFO, I said, hey, we'll never have a perpetual license, and he gave me a hug.”

“Part of the secret sauce with CrowdStrike and selling is that the platform helps sell itself, and we've got in-app trials, nobody has that.”

“We looked like a public company when we were many years Still private. And we ran it that way. You know, okers, management systems, like measurement of everything.”

“A good example of that is silence. They shortcut it themselves to a better AV product, but they were one trick pony. They weren't a platform.”

“At some point there, it's, you have to trust you got the right people, because you haven't interviewed them. You have to accept that you're not going to know everybody. You're not going to know their names.”

“On Monday, we're going to start the 100 by 100. We're taking one day off and we're doing the 100 by 100. He said, well, what is that? And I said, we're going to meet a hundred customers in a hundred days, wherever they are. I flew all over the world to meet a …”

“Up until COVID, you know, we would actually, no matter where the person was hired, they could be in Australia, we would send them to California for one week of training.”

“I think the next five years probably look a lot like, you know, Salesforce trajectory where you continue to build out your platform, you continue to scale your revenue, your annual recurring revenue, additional geographic expansion.”

“We could be pushing cloud and having a slower adoption cycle around the Falcon platform, which is really the endpoint product platform. And the way that was mitigated for us is that the company was doing really high-end incident response services, and so there…”

“So I never looked at it as a three to five X. I looked at it as we're investing in a company, you know, in the first round when we did it was a 150 posts or something like that.”

“In fact, it's an amazing business because once you make money on incident response services, it pulls through product afterwards.”