“Many companies make the mistake of assuming that loyalty is there once they get a customer on board; However, it’s only there as long as you are constantly earning it” With James Litton of Identity Automation
An Interview With Mitch Russo
Make sure you are constantly innovating. Many companies make the mistake of assuming that loyalty is there once they get a customer on board. However, it’s only there as long as you are constantly earning it.
I had the pleasure to interview James Litton. James is the Founder and Chief Executive Officer of Identity Automation. James leads the development and execution of Identity Automation’s aggressive growth strategy, which is driving over 40% revenue growth year-over-year. With more than 29 years of experience in enterprise technology software and systems, James has led teams as an executive living and working in North America, Africa, Europe, Australia and throughout Asia. James initially led Identity Automation to success as a software consulting services firm before guiding the Company through its rapid and successful transformation into a highly profitable, high-growth pure-play subscription software product company. Before founding Identity Automation, James was the Head of IT for Cray, a global supercomputing company. James has also held executive leadership positions at Symantec Software, Veritas and Coca-Cola.
Thank you for joining us James! Can you tell us a bit about your ‘backstory’ and how you got started?
I’ve worked in IT throughout my professional career. I previously worked for big companies, like Coca-Cola, which is where I spent the majority of my career and is also where I met Troy Moreland, Co-Founder of Identity Automation. While at Coca-Cola, I hired Troy to help migrate a networking environment to a Windows environment, which was identity management before it was called that. Through that process we became good friends and worked at Coca-Cola for a number of years. We both then went to work for Veritas Software, which eventually became Symantec. Troy left Veritas to do bench work for Novell, a big player in the identity and access management (IAM) space at that time. Meanwhile, I left Veritas to work for Cray, a supercomputer company based out of Minneapolis, as head of IT. As early as 2003, Troy started throwing around the idea of starting our own company focused on IAM consulting. Over time, we continued to stay in touch about the idea to start the company, and I later moved from Minneapolis to Houston to start Identity Automation.
What was the “Aha Moment” that led you to think of the idea for your current company? Can you share that story with us?
It really started with Troy when we worked together at Veritas. He was hired there to focus on identity and access management, but Veritas wasn’t fully committed to moving forward with an IAM program at the time, so Troy had a lot of time on his hands. He then started surfacing the idea of starting our own consulting company. However, I was in a great place in my career, so to go from that to starting over from scratch was a huge risk. Ultimately though, I decided to quit my job at Cray and took the plunge to start Identity Automation with Troy in 2004.
After consulting for a number of years, in 2009, we made the decision to go down the route of developing our own IAM software and compete with other providers, like Oracle, IBM, and Novell. In September 2009 we hired three developers, all of which are still with us, and released the first version of our product, RapidIdentity, in Q1 of 2010 to 50 customers.
Can you tell us a story about the hard times that you faced when you first started your journey? Did you ever consider giving up? Where did you get the drive to continue even though things were so hard?
It was tough in the beginning. We were investing our own resources into the company and were losing money to keep it running. We were the classic example of founders not making much, but investing everything back into the company to make it successful. We did that for years until we got relatively successful. Initially, when we were consulting, we had no real customers, so we had to go to partners like Novell to find opportunities to help implement the software that their customers just bought. We had a good idea on how long those implementations would take, but we had no idea where “the next meal” or customer was coming from, so to speak.
So, how are things going today? How did your grit and resilience lead to your eventual success?
Today, Identity Automation, by all accounts, is very successful. We have good margins on the software we sell. We choose to invest our profits back into the company, which is why we are seeing on average 40% growth rates, which is phenomenal. Challenges do still exist, like ensuring we have the right resources. As we grow, we find that some resources aren’t willing to grow with the company, so we regularly have to make hard decisions.
On the product side, we are constantly investing back into the product and questioning what we want the product to be. From day one, we wanted to build an IAM company. We didn’t want to follow the example of other software companies that keep growing until they get to a point where people wonder what the company actually does. We knew what kind of company we wanted to build and stayed focused on that.
Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lessons or ‘take aways’ you learned from that?
I can’t think of any funny examples, but we have made a lot of mistakes. I think we’ve done everything we can to learn from our mistakes. We learned the importance of documenting everything. One thing that didn’t come naturally for us was interacting with customers. At my previous jobs, I wasn’t on the customer front lines. When we would take on jobs, we weren’t great at doing scope of work and documenting statements of work for the customer. It took a lot of grit to learn that there is a wrong way to document things, so the customer knew exactly what they were buying and what we were delivering.
What do you think makes your company stand out? Can you share a story?
We strive to be a trusted advisor for our customers and to be fully honest and transparent with them. We regularly have company-wide “All Hands Meetings” where we always discuss customer focus and customer success. Everything we do is for the customer.
The other area that makes Identity Automation stand out is being fully focused on IAM. Our vision is to make it easy for customers to do security right, and we want to deliver products that make that possible. IAM is at the center of the cybersecurity space. IAM is the biggest tool a company can have in its cybersecurity toolbox, and our goal is to be as comprehensive as possible.
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
When you start a company, you hear about having a work/life balance. I don’t think that exists when you are an entrepreneur. You have to work three times as hard as everyone else. I’ve been doing this for 15 years, and I still work 13 to 14-hour days. I leave the office, go home and continue to work. I think that anyone that is concerned about burning out must mentally overcome that. You’ll have to work through the challenges that it creates in your personal life. I give my wife tremendous credit for allowing me to commit this much time to make this successful. It takes a tremendous amount of work, and it never stops.
None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?
Two people come to mind. The first is my dad. He was the kind of guy that when he wanted something, he would make it happen. If we needed our roof fixed and couldn’t afford to hire someone to do it, we would do it ourselves. He was an inspiration to me in learning very early on that if you want something, you have to go and make it happen.
The other was my boss at Minute Maid, while I was working at Coca-Cola. I learned similar lessons from her that you can do anything you want to do and how to make it happen. You might not have the skills right now, but you can go and acquire those skills.
Ok thank you for all that. Now let’s shift to the main focus of this interview. Approximately how many users or subscribers does your app or software currently have? Can you share with our readers three of the main steps you’ve taken to build such a large community?
We have about 18–19 million users across 750 customers. We process hundreds of thousands of users per day when it comes to things like password resets and account claims. We primarily serve three industries — government, healthcare, and education, but we do have countless enterprise companies from every imaginable industry.
The three main steps for us have been:
- Be committed to the success of the customer. You need to ensure that customer is getting value quickly to minimize customer turnover.
- Continue to innovate and offer broad capabilities in the products. Most vendors in the IAM space tend to do one piece of IAM well. Very few have broad capabilities that cover the entire space. Our goal is to be as broad as possible, but still offer a well-put-together solution.
- Be reasonable on what is charged for software and services. We want to ensure that we stand out by not necessarily being the cheapest solution, but by being fair in what we are charging and what our customers are receiving.
What is your monetization model? How do you monetize your community of users? Have you considered other monetization options? Why did you not use those?
We have been on a subscription-based model since 2010. We were early adopters in the space. At the time, software services didn’t quite exist. It wasn’t SaaS as we know it today. By doing a subscription-based model, the customer is entitled to the latest version of the software. If it’s on-prem, they have to pay to do an upgrade if they want help. Offering a subscription makes it easier to deploy, and it also ensures that customers are getting the latest version. On-prem makes it difficult to keep track of what each customer is using in terms of the version.
Based on your experience and success, what are the five most important things one should know before one wants to start an app or a SAAS? Please share a story or an example for each.
- It’s a huge commitment to build a software program. It’s an even bigger commitment to try and build a company around it.
- Understand very early on what the business model is. That’s everything from how you are going to market, to how you are going to fund it, to how you are going to hire resources.
- Figure out how to manage those resources. In the past, we had situations where Troy, our Co-Founder and former CTO, would be out-of-pocket for six weeks for an implementation, and I had to wear the CTO hat in his absence. We are a company of 115 employees now, but we still have to step in when needed.
- Have a rock-solid plan for how to handle deployments and how to support them. People often underestimate how much time it takes to implement a product and do it well. If the product isn’t implemented how the customer expects, the customer will cut their losses, dump you, and move on.
- Make sure you are constantly innovating. Many companies make the mistake of assuming that loyalty is there once they get a customer on board. However, it’s only there as long as you are constantly earning it.
You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be?
I’m passionate about security. It’s the reason we started this. We believe in the value of IAM in the security field. The movement for me would be getting CIOs and CISOs to understand the value that IAM plays, so they can truly protect the security and assets of the company. You would be shocked at the truth of the matter when it comes to the security of healthcare records. It’s shocking how far behind many of these organizations are.
How can our readers follow you on social media?