(exciting music) >> From our studios, in the heart of Silicon Valley, Palo Alto, California. This is a CUBE conversation. >> Hello and welcome to this special CUBE Conversation, here in Palo Alto, CA CUBE Studios. I'm John Furrier your host of the CUBE. We're here with James Segil President and Co-Founder of Openpath Security. Hot start-up in a very cutting edge area that everyone can relate to physical security. But as that grows with the internet, the convergence of physical security with how people work online. It's been a huge issue, we've been covering IOT, we've been covering cloud security, we've been covering internet security. James, thanks for joining me today. >> It's great to be here, John. >> So, you guys are a young company in a very hot area. Great investors, you have a great background, we interviewed in the CUBE before, CUBE Alumni. Before we get into it, this is a super important area, I wanted you to take a minute to explain what you guys do. How long you've been around, what is Openpath? >> Sure, so you know, my partners and I are serial tech entrepreneurs out of L.A. this is our fourth company together over the last twenty years. You interviewed me when we were running EdgeCast. So, it's great to be back. You know, Openpath came from our own frustration. We're an Access Control company so we allow folks to enter office buildings, physical space, work space, using a security tool. That is not a badge. So, this is how we used to enter our prior buildings. So, this is actually my business partners badge pack just to get in and out of our offices, and we were basically tired of wearing dog tags or dog collar, however you want to call it, right? The whole idea was you can use your phone, your phone is your key. So, the credential to get into the office, into the building is on your phone, and mobile was a technology that hadn't really been introduced into the physical, sort of, property technology space before. And by bringing mobile to Bear as well as cloud technology, 'cause all the software's in the cloud. We were able to improve this value proposition and offer a cool solution. >> So, just quickly how, how long have you guys been out with the product and when was the company founded? >> So, we started the company three years ago and launched commercially about a year ago. You know, we spent two years building the technology, getting our patents, really getting everything, figured out. We have software and hardware, it's part of our solution. And so, when we launched a year ago, it was kind of like drinking from a fire hose. We literally had people coming and saying, finally, somebody figured out how to get rid of the badge and use my phone just so it will let me in. And since then we've raised a good amount of money and have been, you know just selling to basically everyone, yeah. >> Congratulations, this is a hot story, so I want to get into it. So, the origination story is, obviously you had to be a successful entrepreneur in the past. Being a serial entrepreneur has it's ups and downs, but you know, with the cloud, everyone thinks, Oh, Security is just a cloud problem. You guys are attacking a physical property, physical security, kind of bringing a DevOps ethos to this. I mean, when you hold those badges up, reminds me of the old janitor key ring. This is the digital ring. You know, all your access. So, clearly an opportunity to automate. >> Yeah. >> So clearly, kind of, obviously, the cloud mentality here. But, your impact is to, kind of, the kind of older industry. Explain this trend of property technology. I mean, most people can relate to their office space. >> Yeah. >> You know, waving the badge to get in, maybe VDI on the desktop or whatever's happening. I mean, talk about the the market place and the trend. >> So, you know, buildings, real estate for the most part, are very slow to move in adopting new technology. And I think, you've seen that in a lot of different industries. Certainly in real estate, there was a sort of slowness or unwillingness to move on past old techs. So, this works, it's an RFID badge. And you can use it and people are comfortable with it. It's worked for forty years. Prop-tech, Property Technology, is really a focus around innovating how you work with, interact with, and spend time at work, in office buildings. But it extends well beyond office, it extends into multi-family residential, health care, any building you really go to. And so, there is a lot money and there is a lot of entrepreneurs who are focused on, how do I improve the quality of every experience we have? When I go into an apartment building, when I got into a hospital, when I go to school, when I go to work and that's really what were focused. We're sort of thinking about that whole experience and reducing the friction in every step of how you interact with that building. >> You know, this used to be an IT problem, if your with big company you sign in, you on board, you get your laptop, you get your badge, someone probably enters your name into a database. And then if you leave it has to be deleted. Is you guys addressing that area? Talk about that piece of it because I think this is more real time, more person without the phone, for instance, your bridging the physical and the logical. Talk about the IT versus the old way of doing it. >> Yeah, so, you know, typically in the real estate world, there's an office manager, a facilities person, maybe, a physical security person, or even like real estate person and they're in charge, at least within the enterprise, of thinking about physical security. But what's happened is, there is a lot of exposure that we have to our data, to our personal safety, to everything really in the office. If you don't protect the physical space, from the thieves or bad actors who want to steal your data or hurt you. And so, all this money has gone into Cyber Security, the chief security officer, the IT department, they have unlimited budgets to go out and solve that problem, to protect the network. But they are literally leaving the front door open. And so, a lot of what is happening today in the enterprise is that the CISO, the Chief Security Team, the IT Team is starting to really gain denomination over this real estate and facilities space, and sort of say, hey, these systems need to work together. If I have a single source of truth to hold all my users and my employees in a single database, I want that to connect, not just to my salesforce.com instance but I want it to connect my Access Control system and how people enter the the building. >> Access Control also an IOT problem, Industrial IOT, we hear that area. Clearly a use case for that opportunity so clearly why you got some funding and I want to cover that in a second on origination story. But the question I have for you is, when you guys started the company and now that you are in market with customers, what's the main problem that you solve? What's like, I mean, you have to solve that one problem, what problem do you solve and where is the growth from there? >> So, I have two groups of sort of customers who I talk to. The first group are tenants or enterprise customers, and these folks who need to move into an office, and most of the choice around when to buy Access Control comes because you're building out space or your moving into an office. You need Access Control. It's not on the list of nice to haves, you need to be able to lock the door. So, when you move into a new office, you need to have internet connectivity, alright, you need to have Access Control, maybe an alarm system, sparkletts water or whatever it's going to be. And we're on that list. So, when people are investing in that capital infrastructure. They're going to future proof that investment, they're are going to choose Openpath. The second group we talk to are folks that are building buildings or renovating buildings. And that's asset managers, developers, property managers, landlords. And those constituents are looking to build a physical space that's both safe but allows them to attract folks to their building as tenants. And so, if you offer amenities, you offer a gym, a cool, sort of, you know, work space, and Access Control Technology it becomes an incentive for folks to want to come and office in your space. >> So, you know, you and I are techies. We love to buy that shinny new toy. The property type tech world, they not as innovative or have a propensity to just at the next thing because, they're about security, they're about that, locking doors. So, I got to ask you, what are some of the things, and they're getting more savvy now, I can see that, so it's clear. You can see most of the digital amenities. First, a start with WIFI, we don't have WIFI, you're done. Now, you're starting to see much more app, centric things happening on these locations. What are some of the areas that people are gravitating in terms that they like, in terms of features with Access Control? What is it enabling from a value stand point? Is it differentiate services, is it access to certain amenities, you mentioned some of that. What is some of the new things that are being created? >> Well, I think the first thing is that we're reducing some level of friction in interacting with you workspace. So, the fact that you can basically, keep your phone in your pocket or keep talking on your phone or keep it in your purse and just walk up to the door and have the door unlock because it knows you're there. That's not just kind of cool that's really just helping out the quality of your day to day experience. You know, ever since 9/11 when we upgraded the security experience almost everywhere. Whether you're entering an arena, a plane or a building that friction is something we are used to now and there is a push back that people want a little bit less friction even though they want that higher level of security. >> Not that I want to get doom day scenario. You mentioned 9/11, they were told to stay in their buildings when they could have been evacuated, everyone in New York knows that tragic story. Huge active shooter environment right now, it's just my kids went to an event in San Francisco. Literally, what is on the mind of people is, oh my God, is there going to be an active shooter? These are examples of things that could go wrong and in security this becomes an Apocalypse scenario that we've been talking about it takes that to get people to take action. So, can you help in those scenarios? How do you help someone either thwart those kinds of security attacks or help them get through them if somethings happening? Let's just say an active shooter comes into a building? >> Yeah, so we've thought a lot about that. And we have kids in schools and we actually have a lot of schools and houses of worship that are buying and installing our system. So, we have a couple different capabilities, lockdown is our latest release. And this is the capability from anyone, anywhere on any mobile phone in that building to enable a lockdown procedure. What I think is particularly valuable here is that if you're basically no where near the fire alarm which is where the lock down button might be as well, and you're stuck in a closet and or hidden away tryna to make sure you're not going to get shot. If you have your phone on you can enable a lockdown and because our plans are kind customized, you can enable a lockdown that let's say locks all the doors in the zone. But lifts up the garage gate so that first responders can get there. And we've seen proven the faster the first responders can get to the problem, whether it's, you know, an EMS person that's tryna to stem the bleeding on someone who is injured or whether it's a SWAT team-- >> Well that's actually proven you saw Gilroy, you saw the response in Dayton. Literally minutes taking those active shooter. >> Well, every second counts, so being able to have a lockdown that works fast, that's effective and that allows people to get through and the bad guys to sort of be isolated is important. The second thing is, we actually have integration with video systems, so you can send a live video feed instantly of every door that's locked down to the first responders. And they can actually see it right there on their iPhone where the bad guy is, what he is doing, real time, from the video systems. They can take over the video system, so it's a pretty-- >> So, it augments the security environment for good and bad scenarios. So, let's get a kind of more realistic scenario. Doomsday scenarios is kind of depressing, but it's real. Our people are planning and are protecting around that. One basic concept, and I got reprimanded at VMware was, I've been at the VMware campuses since they've been building it. But recently I was going to a meeting, and I knew it was building number four, or whatever it was. And I'm sitting there waiting at the door. Someone comes out and I went in and they call it tailgating. Turns out I didn't have a badge and the new person who was there really kind of got in my face and said, You tailgated, I'm like, I do it all the time, I'm like, okay, stop. So, okay, you don't tailgate a VMware anymore and I now know that. But this happens all the time. This is another common problem, I could be stealing laptops, I could be getting the plans at VMworld. I mean, whatever's going on. And this, bad things are happening with tailgating. That's a big thing isn't it? >> It is a big thing. Security experts are telling us it is one of the top three physical security challenges that enterprise CISO's are running into, tailgating. And what's happening is, people just like you, are well meaning are sneaking in. But, there's some bad actors that are sneaking in as well. So, we've got technology that have deployed with partners that actually count the people that are coming in through the door. And if there's two entries when you're only supposed to have one, we can actually track that and instantly make the meter go beep, beep, beep, beep and send an email alert to a security desk or to the individual themself with a video and a picture of the person who snuck in behind you. >> That is a great example, and I mentioned VMware in all seriousness. That actually had happened. There's a huge campus and the reason why, I just didn't want to go to the front I parked at the wrong garage and I didn't want to walk five buildings over. A little bit lazy but that's the point of the large buildings, where the security access comes in. For large campuses, whether it's Universities or corporate, that's the big challenge, right? Not just Access Control but management. >> It's management and so the idea, of sort giving and empowering people to be able to really quickly change, configure and access places. The fact that from your phone you can actually, as a manager change access privileges and give someone who's visiting a temporary pass. That's not one of these, but it's actually a virtual pass on your phone. That's really empowering. So, if you were coming to visit me at VMware, I'd send you a guest pass that gives you one hour access to five different doors and so that you wouldn't have to sneak in. You would basically be able to just use your phone to get in as a visitor for one hour. And after an hour you're not going to be able to get in. >> All right, so let's talk about the company. Openpath Security, you guys obviously targeting the physical space, Access Control, logical physical coming together seamless frictionless environment. Business model? How much funding did you get? What kind of investors do you have? Employee count? Product shipping status? Give us through the numbers. Give us the data. >> Sure, so we started the company three years ago, we came out a stealth mode a year ago and launched commercially, we had actually done our series A internally, we led that ourselves as the founders. And then, when we came out of stealth mode, we had a lot of great attention in the space. Emergence Capital is our lead investor in our series B. We raised $27 millions total. We've got a great team of folks, just under 16 employees. We are based in Los Angeles but we have offices in Indianapolis as well 'cause why not? It's the best place to be. And we're growing fast. We actually sell focused on commercial real estate, but have expanded to multi-family residential. Also, to schools, churches, houses of worship. And we are here in the U.S. now and we're growing internationally over the next two or three years. >> And the product is the a SaaS, managed service, physical? What's the story of the product? >> Yeah, so there's a combination of physical hardware but there is a 100% attached software to it. So, you install a reader at the door, a panel in the IT closet and it's wired as most traditional Access Control systems are but our software is all hosted in the cloud. As well, as the credential that is on the phone. And so, we sort of sell the hardware upfront and then you buy sort of a recurring annual fee associated with the number of doors you own. >> And so you get on the spec that be on the new building, so you do a little go to, you go to market as it is, getting on the design side, suppliers to the building. >> Yup, so, there's the developers, the architects, who put us into the spec. There the system integrators, these are the folks who are low voltage electricians, security system integrators who go out and actually deploy all the wiring you have in this building. They'll go ahead and do the WIFI network, the CCTV camera system, the alarm system and the Access Control system. And so, we have a national network of certified installers who go out, and that's actually how we go to market. We sell through them. >> And you have the software, it's a nice margin. And is there a cloud play here too? Is data stored in the cloud? >> Yeah. >> How are you guys handling some of the backend stuff? >> So, yeah, all the information is stored in the cloud. What's kind of important in a life safety environment is that you have a cloud system that runs it but that you can work if the internet is down. 'Cause imagine if the Internet's down and you can't even get into the office to fix the internet. So, our system works offline as well as online. We store all the credentials locally. >> I remember interviewing Ring's founder at an Amazon event. Simple concept use the cloud. Same thing for you? Not a simple concept but you're in the spec use the cloud with a hundred percent attach rate. >> Exactly. >> All right, so what's the coolest thing that you see happening in this market for you guys? What's going on that you would say that's notable that you would think is important that people should pay attention to. >> There is a number of big trends. You know, we talked about one, right? Which is the whole change of, you know, combining physical security with cyber security and having those two really come together. I'd say the transition of IOT from just the home into the workspace is another big trend we are watching. People are just used to having an NEST on their wall or a Ring on their doorbell and the want Openpath on their door at work. And that's something else that we've seen as a big transition. People are getting used to having an easier experience and I think the final thing is how people use the workspace, right? People work all over the space now. It's not just at their cubicle and that's impacting. >> I got to get some commentary and understanding around the name Openpath because most people in these kind of areas that you're in have closed systems. You know, the HVAC system, I'm running an IOT like an operational technology. Information technology is a protocol based OSI model, open source. So, those worlds are colliding, we're covering that in the whole IOT, industrial IOT trend. Openpath Security? If it's open can I hack it, what's going the Openpath name? Tell us why Openpath? How are you open? Tell us the story behind the name? >> I'm really glad you asked. We were really frustrated when we analyzed the space, as investors and entrepreneurs in this category. We saw that all the systems that are out there, are incredibly closed. Their proprietary systems, they work on old protocols and they're not open. Ours is open. It's built on open API's. Every element of our technology can be connected to, right? And we have tons of developers who are integrating, just like they do in the web, with Openpath. And that's something you can't really do in the old physical Access Control World. So open is just correlating that. >> So, you that's from an ecosystems stand point, you guys enabling others to build on top of your stuff. >> Oh yeah, we've got Envoy the visitor management company. They've got an integration with our Access Control. Density, which is a really cool people counting tool. We've got Camo, a video integration tool. All these folks are integrating with us because it's open and it's really easy to do. >> Okay, so I got to ask the question. I'm now, I'm a building person designing the specs for the new campus, open? That sounds insecure. How do you guarantee that you're going to to be secure? I'm worried about security. How can a hacker get in, take over the physical space, shut it down, that's my concern. How do you address that? >> Yeah, no it's legit. So, what I often say to people is, let's see. You can have a badge, like this, right? And you can pick up my badge and find it anywhere you want, right? And now you're James, right? You can go take that, and you can get in anywhere you want. But I challenge you to try to use my phone. Try to unlock right now, right? >> There it is. (laughs) >> That super computer is encrypted, there's no way you're going to break that. This is the most secure way to enter anywhere. >> But if I get, that's an iPhone but with an Android I'd get some Malware on there. >> But the Malware that you get on your Android isn't necessarily going to allow you to authenticate our system. >> So, you're content, even though you might be on an open device, you guys are containing the app, security app on the device. >> Yeah, so the same protocols that we use on the internet to have secure HTTPS communication between any kind of client, your computer and a website. We're using that same hand off. Where we have rotating security certificates on this, as well as in the cloud, as well as on the panel. So, everything is fully encrypted end to end. And that gives us a level of security that's unmatched and unrivaled actually, in the Access Control space. >> James, thanks for coming on theCUBE, final just give a plug for the company. What's new, what's happening? What's going on Openpath? What's next for you guys? >> Well, if it's a plug openpath.com that's an easy one. But, I think for us, we're really growing in a way that people are excited about. I want to change the work day experience. So, everybody who's out there, who's tired of using a keycard and a badge, I want them to go to their boss and say, why can't we upgrade to Openpath? Go to your landlord and say, hey, I'm negotiating this into my tenant improvement. I want Openpath as a part of how I sort of access the building. The trends that we're really excited about, this lockdown technology, the Anti-Tailgating Technology. Those are really cool, sort of advantages that we give the enterprise and we're just excited to be helping people improve the quality of the workday. >> And what's the reason why you're winning deals? What's the one factor or two factors? Ease of use, open-ness, convince features? What's your-- >> I love it, you're selling my product for me. It's ease of use, it's the fact that it reduces a number of steps in the friction you experience personally everyday. And that the enterprise or the landlord experiencing managing a system, is less expensive and more secure. Kind of all the things you want. Plus, I mean, how much sense does it make that you don't have to carry around ten badges that you can actually just have it all on your phone. It just makes sense. >> Soon series C funding around the corner. (laughs) >> If you're interested, we should have a conversation. >> TheCUBE fund's not yet setup but when we get theCUBE venture capital fund will be in. >> That's good, you let me invest in your company, I'll let you invest in mine. >> We'll talk. James Segil, entrepreneur President, Co-Founder Openpath Security, hot start up here inside theCUBE. Featured startup here. Thanks for watching. I'm John Furrier. (exciting music)