At TSVC, we 've already launched our first three episodes for Deep-Tech Founder Podcast - On the Edge - where we talk to tech entrepreneurs about the challenges they face and the solutions they build. Our latest guest, Michael Shieh, is the Founder and CEO of Appaegis, a company that provides the most secure, agentless zero trust access solution to connect authorized users and devices to enterprise applications.
Michael and his co-founders witnessed that many enterprises were moving to the cloud. They realized this trend introduced new challenges of protecting data effectively, so they came together to design and develop a solution - one that would provide full visibility on what data has been accessed and stored as well as incorporate features to stop malware and other security threats (more on the industry here).
Michael has seen the need for Appaegis to grow rapidly during the pandemic. Tremendous security concerns arose with more people working from home. At the office, everything was rather well protected and monitored, but now, there’s a new need for remote trust to protect remote assets with a paradigm shift in the necessary security model.
Remote work, Michael believes, is here to stay. IT departments no longer have great visibility or control, so IT teams are desperately looking for zero trust solutions that ensure the security of remote assets from users to application - truly end-to-end. In Michael’s view, the traditional definition of zero trust is insufficient because it does not incorporate data capture. So with Appaegis, Michael and his co-founders set out to create a new security solution - one that provided full data visibility and control.
Unlike existing zero trust solutions, Appaegis combines the isolation platform with software defined fabric to provide a secure remote asset solution that is also quite flexible and easily deployable to truly protect a distributed environment.
In our conversation, Michael reflected on his journey building Appaegis, sharing thoughtful, hard earned lessons around pitching to investors, finding product market fit, and building companies.
Investors are ultimately looking for companies building in big markets. Even if these companies pivot or if additional competition enters the market, the companies playing in these markets have a larger pie to go after. Typically, Michael notes, investors like a greater than $1 billion total addressable market.
“Beyond the market, you also need to tackle a clearly defined issue - a problem people are clearly suffering from,” Michael shares. “You need to show that your chosen problem has a clear technology or business solution - that your startup can create a solution that is easier, faster, or cheaper.”
Most investor concern centers around competition. Even if the market is large and even if the problem exists and is painful, if other players create a better solution or have better execution in reaching potential customers, then your company can easily be squeezed out of key deals and ultimately fail.
To address investor concerns about competition, highlight your differentiation from both the technology and the business angles. How is your product different? How is your sales approach different?
In addition to the differentiation, Michael notes, “share a well defined plan for your company to actually realize and reap your differentiation.” Being unique isn’t enough. You need to show that you can win the biggest deals.
After you finish the hard work of pitching investors and once you sign the term sheet, don’t ignore your investors! Investor value add goes beyond capital. “Leverage your investors to reach more customers, more talent, and more partners,” Michael advises.
When leading a company, there’s always ups and downs. “On the same day, you can get both good news and bad news,” Michael shares. The good news presents opportunities for the team to capture. The bad news presents challenges for the team to solve. Either way, everything comes down to people. “People are most important,” Michael notes.
Starting a company and building something truly from the ground up is incredibly challenging. “Most things you do as a founder are beyond your existing experience, so listen and learn. Listen to the customer. Listen to the market. Listen first to truly understand the company from all fronts from sales to business to technology.”
But always remember - you’re founding the company to do something different. “Don’t be afraid to challenge the status quo. Build a different feature. Find a different way to market. Don’t do things as they’ve always been done before.”
Most startups start with an idea. It’s this idea that gets the founders excited and encourages them to take the leap of faith in launching a company. But until you truly test the idea with customers, get feedback, and test the customer willingness to pay, you don’t have product market fit.
“Get customer feedback as soon as you can. Figure out what they like, what they don’t like, what they need, and if your specific use case and design can solve their pain point. Expand your use case to what customers are actually willing to buy and pay for. Finding product market fit is really an ongoing process - one you’re constantly engaged in as you expand to new markets and iterate on your product. Product market fit goes beyond the product itself - you also need to consider how to position the product, how you message its value proposition, and how you ensure it gets into the hands of paying customers,” Michael says.
We closed out our conversation with Michael reflecting on his journey building Appaegis. He shared what he wished he knew and what traits he thinks makes an excellent founder.
“Get more money than you think you need. There’s always opportunities and challenges you can’t anticipate in advance. Ensure you have enough capital to solve these obstacles and capitalize on the potential upside. Also, test your product as early as you can and with as many people as you can - the earlier you get feedback and the more feedback you get, the better and sooner you can define your direction,” Michael shares.
“Be optimistic. Keep your hopes high. The founder is the leader of the company, so when bad news hits, you should try to keep everyone’s spirits high because they will be looking at you for guidance,” advises Michael.
As a founder, you’ll constantly be thrown into unfamiliar situations. Michael shares closing advice for navigating the ever evolving roller coaster of being a founder. “Try to get help and mentoring whenever you can. Reach out to friends, advisors, investors, and other people who have expertise in a particular field you’re looking to ramp up on - whether it’s sales or operations or something else. Keep a growth mindset. Always aim to learn new things. Be flexible and open-minded.”