CrowdStrike: Cyber SaaS - [Business Breakdowns, EP. 72]

This is Jesse Pujji and today we are breaking down CrowdStrike, the cybersecurity provider. Founded in 2011 by George Kurtz, the former CTO of McAfee, CrowdStrike differentiated from firewalls and anti-malware by building a platform that actively predicts threats rather than blocking attacks that have happened before. Today, CrowdStrike serves over 18,000 customers globally and is valued at $45 billion. To break down CrowdStrike, I’m joined by Roneal Desai, a senior public market investor focused on enterprise software. In our conversation, we discuss how CrowdStrike reinvented cybersecurity for the cloud era, why the pandemic and remote work drove a paradigm shift in the industry, and how the company helped the DNC identify Russian hackers during the 2016 election. Please enjoy this breakdown of CrowdStrike. For the full show notes, transcript, and links to the best content to learn more, check out the episode page here. ----- Business Breakdowns is a property of Colossus, LLC. For more episodes of Business Breakdowns, visit joincolossus.com/episodes. Stay up to date on all our podcasts by signing up to Colossus Weekly, our quick dive every Sunday highlighting the top business and investing concepts from our podcasts and the best of what we read that week. Sign up here. Follow us on Twitter: @JoinColossus | @patrick_oshag | @jspujji | @zbfuss | @ReustleMatt Show Notes [00:02:29] - [First question] - Overview of what CrowdStrike is [00:05:28] - The size and scale of CrowdStrike today [00:07:10] - Customer use-cases before and after CrowdStrike [00:08:45] - What software would have been used prior to CrowdStrike [00:12:17] - How many customers could there be and who CrowdStrike is taking share from [00:16:41] - What their prior estimates lacked in terms of TAM [00:17:17] - Whether or not Palo Alto Networks is a true competitor [00:19:33] - The criteria used for deciding which service is better than the other [00:21:16] - The early days and founding story of CrowdStrike and their structural advantages [00:27:30] - What about COVID opened up an opportunity for CrowdStrike’s growth [00:29:44] - The P&L and the special parts of the business that show up there [00:34:21] - Strategic acquisitions and product expansion [00:39:21] - What’s behind their distinctive growth [00:40:54] - Other noteworthy aspects of their gross margin and R&D [00:44:17] - Distinctive aspects of their sales and marketing strategy [00:50:00] - What their unit economics looks like today [00:52:35] - Key factors that would contribute to the bull case for CrowdStrike in ten years [00:54:14] - Why a security company would become the integrated layer [00:55:47] - Biggest risks and threats to CrowdStrike over the next decade [00:57:41] - Lessons for builders and entrepreneurs [00:59:05] - Lessons for investors [01:00:09] - Where to go to learn more about CrowdStrike