Carbon Black IPO: One, Not Done
By Jeff Fagnan, Founding Partner, Accomplice
“Thanks. It’s simply one more step of building this company. We are at step three of seven.” That was Patrick Morley’s terse response to my congratulations text on our impending IPO. This wasn’t a fake platitude; it’s the core of Patrick and Carbon Black.
I have a mountain climbing guide friend who says he enjoys scaling mountains because it breaks down all decisions and stimuli to one fundamental question: keep going up, or retreat back down. Bit9, renamed Carbon Black after their merger in 2014, has been that type of single-focus journey. No one would have faulted us for retreating at some point. We could have retreated early and sold the company to McAfee shortly after the Series B and before we built a go-to-market organization. We could have retreated after we built the go-to-market team and no one bought the product, right as the financial world collapsed in 2008/2009. It was a debilitating time to operate and grow a young company. We could have retreated in 2013 when a nation state targeted and hacked us. We could have retreated more recently when a cohort of well-funded competitors entered the fray and attacked our market with dollars, marketing FUD, and hustle.
But we never retreated, and we purposefully and methodically continued stepping up an increasing slope with more conviction on our path. These were never economic or value decisions. They distilled down to group of believers committed to building a company that matters while doing hard and important things like protecting economic integrity, nation state, and daily lives as technology dependence continues to grow. What’s happened with Equifax and Facebook and Russia is the new reality and unfortunately only the beginning. The digital is eclipsing the physical in significance. Cybersecurity is just security.
Today’s IPO originated from an elegant nucleus of modeling an enterprise security solution after the human immune system’s concept of self versus non-self recognition. I first met Bit9 in 2004. The founders, Todd Brennan and Dr. Allen Hillery, were fresh off the sale of their first company Okena to Cisco Systems. Okena built the world’s first intrusion detection systems, a true technical accomplishment, but Todd and Allen were disenfranchised with the lack of true adoption of their product and felt that security was too damn hard to implement and wrought with false positives. They started Bit9 with a $2m Federal NIST Advanced Technology Program grant.
We (Atlas at the time, now Accomplice) were the first institutional investors, leading the seed round in 2005 and incubating the company in its earliest stages. It went on to be housed at a recruiting firm in what was a dystopian East Cambridge at the time, literally melting their servers from the complexity of processing the algorithms and data they were working with. Today, Carbon Black provides next-generation endpoint security to more than 3,700 customers globally, including 33 of the Fortune 100. Their solutions enable customers to defend against advanced cyber threats, including malware, ransomware, and non-malware attacks. It’s a long way from melted servers.
But a great idea alone does not translate to a great company. And while lots of events and people contributed to making Bit9 what it is today, two seminal events defined our path:
1. Hiring Patrick Morley. Patrick deserves the bulk of the attribution and credit for today’s success. Patrick joined the company in 2007 and is simply the best leader I have ever worked with. Bit9/Carbon Black was built mirroring his makeup: focused, high metabolism, the utmost integrity, and an unwavering belief that one should make an impact. I laugh out loud thinking about a meeting with Patrick over ten years ago at the Waltham Doubletree. I was recruiting him and told him that this was a simple 18-month project to exit. Patrick, I simply got the units wrong :)
2. Acquiring Carbon Black. Carbon Black got started in 2010 and was incubated at Kyrus, a Virginia-based security firm. Carbon Black brought detection and response expertise and an impressive young tech team of offensive attack-minded security professionals. It was the right injection of people and product at the right time. Plus we got a rocking new name out of it. CEO Mike Viscuso, who moved to Boston to become the company’s chief technology officer, is a true evangelist and probably has the greatest dynamic range of any entrepreneur in our portfolio. He can go toe-to-toe on strategic issues with a Fortune 100 CEO or Navy Admiral, then modulate to grabbing a beer with a developer and debating compile time polymorphism in Java versus C+.
Yes, today certainly isn’t a conclusion, but it does validate a lot of effort and it’s damn refreshing when good people win by doing good. Patrick is probably right in his assessment of our continuum, and we couldn’t be more pumped about steps four through seven. As investors, we have been around since the start and don’t plan to leave anytime soon. Today is the first time that many people will hear about Carbon Black. Yet it’s been 13 years since we first backed it, with 14 additional investments from us along the way including leading the Series E round to catalyze the purchase of Carbon Black.
Huge props, congrats, kudos, and thanks to the 900-plus members of Carbon Black who are celebrating this milestone. In addition, there are many people who aren’t part of the company today but who made today possible. It’s not feasible in this post to deliver thanks to all who deserve it, but a special personal shout-out to Todd and Allen, Brian Hazzard, Ed Philippine, Eric Schurr, Ian Poynter, George Kassabgi, Chris Lord, Di Hall, Bob Preble, Drew Houston, Gordon Pothier, Melissa Leffler, and Harry Sverdlove.
Carbon Black is joining the ranks of the less than one percent of venture-backed companies that make it to this milestone. This is big not only for their employees and their families, but also for the region and the new startups that will branch from the company’s DNA. There have already been a few, including Edgewise and Randori, and we expect many more. Dropbox had its origins at Bit9 as well. We let Drew and that idea escape to the West coast, but we’re set up not to make that mistake again.
Building companies to IPO is part of our ethos at Accomplice. Our patient capital approach is suited for long, arduous journeys where resilience to adversity is part of a company’s genetic makeup. We’re here if you want to build big, beautiful, and sustainable companies that matter.