Podcast - Interview with Mark Lee, Founder and CEO, Splashtop
Part of our special series of episodes that we're recording in partnership with the European PR Agency, Tyto, and their own Without Borders podcast, this interview is with Mark Lee, Founder and CEO, Splashtop.
Part of our special series of episodes with leaders of unicorn companies that we’re recording in partnership with the European PR Agency, Tyto, and their Own Without Borders podcast.
Mark Lee, Founder and CEO of the Remote Access and Remote Support Company Splashtop, joined Russell Goldsmith and Tyto's Founder, Brendon Craigie online from California.
Splashtop was founded in 2006 and raised $65 million in new funding at the start of 2021, which pushed the company's valuation to over $1 billion.
Origins of Splashtop
Splashtop’s four co-founders have known each other since college days at MIT in Cambridge, Boston and have worked closely for 37 years. Splashtop is their second start-up together.
Mark explained that after MIT they went their separate ways to work at larger companies, to build a safety net first. In 2000, they launched their first company together.
Their first start up was successful and was sold to a public company after four years, it was in server management space. Today, HP, Dell, and IBM servers are still using their software. It's an embedded data centre system management software.
In 2006, the same team launched a new company, Device VM, which later became Splashtop.
Their first start up was in the server data centre management and server market, selling around 10 million units a year. After that, they decided to focus on a bigger volume market, the PC market.
However, back then, the problem was that Windows XP took forever to boot up, therefore they thought to give people an instant on browser OS and so Device VM (VM stands for Virtual Machine) was born.
They were the platform to enable the netbook and shipped on over two to three hundred million PCs per year. Then when the mobile wave came in late 2009, they had to pivot into the mobile space. They developed a new product called Splashtop and changed the company name to the product name for consistency.
The aim of Splashtop was to create a bridge between mobile and PC devices. They first launched their app on iPad, they were so successful that for many months, they were the number one selling app. Mark said they built their brand on the whole consumerization and ease of use and people loved their product.
However, Splashtop was missing a few manageability features, and they wanted to support customers more, so they listened to the feedback from those IT and MSPs and added those features through the years. Now, 98% of Splashtop’s revenue is B2B.
Mark said that the whole shadow IT wave and BYOD wave have helped them to expand into the market, but ultimately, really listening to the customer. He is personally always involved trying to make sure their customers are happy too.
Impact of the Covid Pandemic
Mark said due to the pandemic, their business has grown over 160%, because of the need for remote work. Splashtop’s remote lab has enabled many schools which require high end workstations, to extend out to students at home with any BYOD devices.
Similarly, several animation companies, including Disney, were all customers during Covid, as they needed to do remote video editing and Splashtop provided full performance. Covid research, and medical equipment companies came to them as they've been using their product to enable remote research.
The Remote Economy
Mark said people recognize that VPN is broken, it's based on architecture from 20 to 30 years ago, more workflow applications are moving to the cloud and employees are everywhere.
The firewall was designed to assume everyone is working in the corporate network, the whole security architecture is being rethought and during Covid, they saw a lot of customers bypassing the VPN using Splashtop.
Mark said ransomware is everywhere, and they are seeing an opportunity to build a stronger, better solution to protect users whatever they want to do remotely.
Becoming a Unicorn
Mark told his team two years ago, pre-Covid, that their goal was to become a unicorn in two years, but the pandemic accelerated this, and they achieved it in one year. People were ecstatic and proud, however, he said that as a CEO, his challenge to the team is, what's their next big goal?
They have been profitable for years since they pivoted the business from Device VM to Splashtop and haven't fundraised for over 10 years. When they did the unicorn round in 2020, they did not need to raise a round but did so primarily to elevate their brand and wanted to begin to position themselves towards IPO and needed to attract talent.
So, in the past year since becoming a Unicorn, they have expanded their team significantly and continue to generate millions of dollars cash flow per month, they haven't touched a single dollar of the money they raised.
Communications and Culture
Mark said that because they have four co-founders who've been around for 30 years, they are like a family, the four of them behave the same and this culture permeates across the company. They care about every employee; the employees care about the company and in turn he believes they care about the customers.
The team is very focused on customer success, and it has been reflected in their NPS. Every time someone uses their product, it will prompt a rating, they really care about ensuring that user experience is always top of mind. Mark said life is too short and all four of the founders are fun loving people and enjoy the whole journey of learning.
Pre-Covid, most of Splashtop’s employees were in the Silicon Valley, so Mark said it's been a learning process for them moving to remote work.
Fortunately, because they have good remote solutions, the team were instantly ready to work and as they grow, they have started hiring people all over the U.S. They use Microsoft Teams and have a very open, transparent culture.
External Communications and Being a Representative of the Company
Mark said he’s always viewed himself as an introvert but compared to many of his MIT colleagues, he now thinks he’s an extrovert, and that is the reason he is the CEO as he can communicate better.
He said it's largely a learning process and it's a forced function when you must raise capital but with a unicorn round and preparation towards IPO, he will have to face a lot more public analysts that they need to prepare towards.
What Initial Decision is Most Vital to Building a Successful Business?
Mark said people are always amazed that he and his cofounders have been friends for 37 years and in business too. There's always going to be a lot of disagreements but the trust they have built is unparalleled and they know one another’s strengths and weaknesses.
When they started as Device VM, they had to pivot at its peak, their revenue was declining, and they had to lay people off. As a start-up CEO, he is always optimistic, and he felt he could drive new revenue to compensate for the declining revenue from the old business quickly.
But it didn’t happen as quickly as he liked, and they had to downsize from 300 people to 60. Mark said he wouldn't say it's a big mistake but more a lesson learned.
Biggest Communications Challenge
Mark said they have been very fortunate in terms of staying open, communicating with all employees. However, following the unicorn round, with their new CMO on board and marketing team in place, they are making investments to up their branding and communications upmarket.
Mark thinks remote work and learning is here to stay and the need for a secure remote access solution is critical for our future digital economy. Splashtop wants to play a critical role in that whole process to deliver a much better user experience.
Complexity comes with a lot of investments, and they want to be sure everyone is growing more professionally as well as personally. Finally, he believes everyone should enjoy the financial success together.