Orion Hindawi, Cofounder and CEO of Tanium. (AP Photo/Jeff Chiu)
On Tuesday morning in San Francisco, Orion Hindawi will kick off Tanium's inaugural user conference as the CEO of one of the hottest cybersecurity startups in Silicon Valley. But the 36-year-old Hindawi wants the $3.5 billion-valued Tanium to be known as more than a tool to fight hackers.
Industry watchers can hardly blame him. Despite a steady drip of new high-profile hacks, 2016 has been rough for public cyber companies, from FireEye (down 40%) to Palo Alto Networks (down 14%). Hindawi has his eye on the slow tech IPO market, telling the Financial Times earlier this month that Tanium would likely go public as soon as 2017--and being named among those struggling companies would not be beneficial.
"I don't even want to be known as a cybersecurity company, I want to be known as a platform company--and the reason is if you look at the cybersecurity market or another niche market, there are cheaper ways to do that one thing," Hindawi told FORBES in an interview last week. "But it's when you start to look at a panorama of four or five things that Tanium becomes a huge efficiency. We don't have many companies coming to us looking to solve just one problem."
Regardless of its classification, Tanium will have lots to offer Wall Street whenever it decides to float. Hindawi told the Financial Times that Tanium was on pace to hit $270 million in revenue this year, up 80% from the year prior (he declined to confirm the numbers or IPO timeline, noting he was already "in trouble" with his lawyers for those statements). The company says it has been cash flow positive every quarter for its history, including during its recent shift to a software-as-a-service business model.
Most striking is Tanium's elite customer list, which includes the majority of the largest 100 companies in the United States by revenue and many agencies of the federal government. In February, Tanium announced a $10 million per year deal with the U.S. Air Force. All ten of the largest U.S. banks use its software, as do Target, Amazon, and Verizon.
A SAAS business model seems to suit Tanium, with customer retention over 99%. Ben Horowitz, general partner of Andreessen Horowitz and Tanium board member, told FORBES the only customer he can recall Tanium losing was a company that went bankrupt.
The startup's success so far is due to its advanced endpoint management system that lets IT departments scan and control thousands of computers, phones, and other Internet-connected devices in real time. Orion Hindawi and his father David founded Tanium as a stealth startup after leaving their previous company, BigFix, which they sold to IBM in 2010 for $400 million. Combined, father and son own more than 60% of Tanium, making them each billionaires as of the last valuation. They have raised more than $260 million from the private markets, but do not plan to dip back into those waters again.
"I think the right way to make a great company is not to get acquired. I don't think the right way to make a great company is to stay private indefinitely. I don't buy into the narrative that these super mega unicorns, or whatever we're calling them these days can sustain themselves forever. I don't think it's fair to their customers, I don't think it's fair to their employees, I don't think it's fair to their investors," Hindawi says. "I don't think it's sustainable and I don't want to be part of it."
Tanium is targeting potential new customers, but much of its growth strategy going forward will entail building additional subscription services on top of its core IT architecture. The company sells eight such modules today, including those for software patching, compliance, and incident response. The pitch: replace your outdated point-solution software from other companies with a range of products from Tanium. The plan is to release one additional module every quarter, with a target of 55 subcategories Tanium says represents a combined market of more than $48 billion per year. New customers are already using, on average, 60% of the available modules.
"We're typically starting with five out of eight modules in a new customer, and what they're doing is ripping out [other products] left and right and that makes it really sticky," Hindawi says. "If it works, that gives them confidence in the ninth module."
Hindawi's focus is on hitting those product goals and maintaining Tanium's culture as the company scales. With 450 employees, Hindawi still makes time to spend 15 minutes interviewing prospective candidates himself. A first-time CEO, he has solicited advice from executives like Jeff Bezos, Howard Schultz, and Meg Whitman on this tricky hyper growth stage. (Hindawi and his wife will also welcome their second child into the world in the next couple of weeks.)
"A big reason that our customers believe in us is that we care about doing a great job, and a lot of companies used to have that but lost it as they grew," Hindawi says. "That happens around this time in a company--going from a few hundred people that you know kinda well to a few thousand people that you don't know at all. When I look at the risks... growing a company and operating a company well and not losing in success what makes us great, that scares me."
