Craig Unger: From Living In A 350 Sq. Ft. Apartment To Selling His Startup For $50 Million

Craig Unger is the founder and CEO of Hyperproof which is radically reducing the risk and cost of keeping companies and their customers’ data in compliance. The company has raised over $5M. Prior to this Craig Unger cofounded Azuqua which he sold for over $50 million.

In this episode you will learn:

• The friction that gave birth to Hyperproof
• How much they’ve raised and who from
• His top tips for choosing a cofounder
• Craig’s top 3 pieces of advice for new founders
• The best reason for launching a startup

 

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About Craig Unger:

Craig Unger is the founder of Hyperproof.

With Hyperproof companies can leverage new technologies such as Blockchain, Robotic process automation and Machine learning to greatly reduce corporate risk and lower the costs of meeting the commitments they have made to their customers, regulators, corporate boards and other key stakeholders.

Craig Unger loves technology and is addicted to thinking about product design and market fit.

Craig Unger started as one of the creators of Microsoft Excel where he designed Pivot Tables- the original “big data” feature.

Afterwards Craig Unger spent 5 years leading the Microsoft Access team through 1B in revenues. Then in 1999 Craig Unger jumped into the cloud and built the systems that collect more than 10B annually across Microsoft’s cloud services.

Then, Craig Unger led the Microsoft Dynamics CRM business through 20 quarters of double digit growth.

In 2013, Craig Unger founded Azuqua and built the world’s most advanced cloud integration product.

Now Craig Unger is obsessed with reducing risk across organizations of all sizes with the power of Hyperproof.

Connect with Craig Unger:

• Linkedin
• Crunchbase
• Twitter

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FULL TRANSCRIPTION OF THE INTERVIEW:

Alejandro: Alrighty. Hello everyone, and welcome to the DealMakers show. Today we have a very interesting founder. I think that we’re going to learn quite a bit of doing the full cycle of raising, building, exiting, and then also, all the lessons learned along the way because, as we all know, entrepreneurship is not a straight line. Without further ado, I’d like to welcome our guest today. Craig Unger, welcome to the show today.

Craig Unger: Thanks, Alejandro. Thanks for having me today.

Alejandro: Originally born in Brooklyn, New York. I understand that’s not a very friendly environment then, so tell us about growing up there.

Craig Unger: Yeah. I was born in a middle-class section of Brooklyn. I would say, lower-middle-class. I went to school at what we called the Zoned Public High School, which is the local public high school. I used to have to walk through a series of empty lots to go to school. Some very questionable things, over the years, were found in those lots. I won’t go into more detail, but let’s just say it was a dangerous environment. Where I grew up, there were gangs. It was a time when the Guardian Angels were formed, and New York was not the same place as opposed to Giuliani, where he cleaned up New York City. So I grew up with a lot of stresses on us both financially and safety-wise. Then when I compared myself to some of my peers, here, it was a very different upbringing. Let’s just say that.

Alejandro: Alejandro: 100%. How big was your apartment?

Craig Unger: Actually, in New York, where I grew up, it was not brownstones. That was a different part. These were rowhouses. They were low-end rowhouses that we two-family rowhouses. You had to go upstairs to get to the main. Then there was a further set of stairs to get to the second one, and then there was a garage on the ground floor. What a lot of landlords did was to separate the garage into two parts, and they rented the other part. They made it into a livable space, about 350 square feet, and all these houses became illegal three-family houses. So, post my parents getting divorced when I was about 12 years old, we moved into a garage, which had absolutely no space. It had one main room that was a living room and dining room. My mother’s bedroom, family room, everything, and then it was just another bedroom, tiny galley kitchen, and the bathroom. It was very modest. At that time, my mom had decided post-divorce to go back to school. My brother and I, he’s a year older than I, were in that school that I was talking about before. It was a high-pressure, low-income environment growing up there.

Alejandro: Every experience and every phase in our lives really shapes us with character, the personality, and our views. Also, that gives us the proper lens and the analysis for interpreting or for giving whatever shot we have in front of us. In every event, there are lessons learned. For you, in this case, it was tough. I also believe there were some definitely not fun things that happened with your best friend or with your grandfather. If you would like to expand on that, I think it would be helpful for our listeners in understanding you as a human being, as well.

Craig Unger: Sure, Alejandro. A few things for me that were formative were, 1) When I was very young, unfortunately, my grandfather was murdered in a store in Brooklyn, New York, which obviously, sent shockwaves through the family, and it was almost like a defining moment. Another defining moment, a few years later, I lost my best friend in junior high school. He was a young adult when this happened, and he was murdered, as well. So, those were the kinds of things that were happening around us growing up. But at the same time, in both a challenging, but also on a more motivational side was my other grandfather on my mother’s side. He and my grandmother were both Holocaust survivors. Watching him in terms of what he went through to put his family into a place where we could succeed and thrive was extremely motivational. Sometimes, challenging too, but very, very motivational. So I had all those experiences to work from.

Alejandro: Obviously, on the entrepreneurial side, it’s all about resilience, persistence, falling, and getting back up. How would you say this upbringing — I’m sure you had amazing moments, but it was quite challenging. It was a lot about survival. How do you think that has shaped you as an entrepreneur and also as a person?

Craig Unger: Let me expound on what happened with my grandfather. Then I’ll answer that question. My grandfather met my grandmother at a displaced-persons camp after the Holocaust. They were both freed from concentration camps. My grandfather, by the American military — he was actually along the side of a road, and he was saved by a Jewish guy from Brooklyn, who it turns out I’m a Jewish guy from Brooklyn. My grandmother was freed by the Russians, and they met in a displaced-persons camp. That’s where my mother was born in Italy. My grandmother and my mother came to the United States, but my grandfather couldn’t come. So, he had to struggle for years just to be able to be with his family. When he got there, he had no money, nothing in his pocket. He was delivering furniture. My grandfather, due to malnutrition, is about 5’3″ tall. After going through experiences like that that were so physical in terms of doing what he needed to do to support his family, he used to be able to bring me to my knees, and I’m 6’3″. He used to be able to bring me to my knees with a handshake. That’s how strong he was. We saw him struggle. We say him get up at the crack of dawn, come back, eat, and directly fall asleep and just give everything he had to make sure that we had a place to stay, and a way to thrive, and have everything we needed. We had what we needed growing up. It wasn’t much more than that, but it was provided by my grandparents, and also my parents, who were struggling as well. I think that when that’s your background, it does make you think differently about being more careful and making sure that you’re doing the things that you need to do in order to provide for your family, on the one hand. But also, that the things that you’re putting your time into, the places you’re investing your time are a worthy place to invest and that you’re living up to the life that was led by your parents and grandparents before you. I think, as a child, it gives you a pretty big nut to crack and a high ideal to hit, which could be very motivational and help you excel. I suppose there are a lot of instances where it could be destructive too, but in my case, I was able to turn that around and use it as a motivational factor for my education and my career growth. It’s always been with me, and it’s always something that I think about, and I do cherish and treasure what my family has done for me.

Alejandro: Then, Harvard was that inflection point more on the professional side where all of a sudden, there’s a visit that happens at school, and that changed everything for you. What happened?

Craig Unger: Yeah, that was unique. My brother is one year ahead of me, and he went to the State University of New York at Albany, which was common for good students to do in New York. I thought I might go to the same school or one of the city universities. But when I was a junior, I was called down to my guidance counselors office, and there was a woman who was there from Harvard, and we had a discussion. After our discussion, she asked me if I would consider applying for Harvard. Of course, I got the hint, and I was extremely enthused. I had never thought that was something that could be a reality for me. It wasn’t really in my kind of sample space to think about that. I ended up almost immediately applying. I applied to Harvard under what’s called an Early Action Program, which is where the student signifies that that’s their top interest to go to that school. Come December — this was before computers — I called the Harvard’s Admission’s Office the first day that they had the results. I heard the admission’s officer turning pages in a physical book. They were turning the pages of my life, and the person said I was admitted. I couldn’t believe it. I said, “Can you please check that again? My name is Craig Unger. Are you sure I was admitted?” He said I was admitted. I was at home. My brother was already in college, so I couldn’t tell him. My mom and dad were both working. My grandmother, who lived right above us, was out shopping, so I started bouncing out into the street telling neighbors, “Oh my gosh! I can’t believe that I got into Harvard. I can’t believe it.” That started a chapter in my life that dramatically changed my life for the better, and it was just an amazing experience.

Alejandro: That’s incredible. Were you always into math and computer science? If so, how did that come to you? How did you get that interest and that love for math and computers?

Craig Unger: I always into math and computer science. I ended up majoring in college in math and computer science. In high school, I was captain of my math team. Also, I was 1 of 30 kids who were on the New York City math tea, and we competed against other cities around the country. I think the way that I got into math came from my father. My father was an insurance auditor and an accountant. He used to work for a large insurance company. Let’s just say the good hands people. What he used to do when we were kids is, he would give my brother and me math problems that we would have to calculate in our heads against calculators, so I got very quick at it. My dad, himself, was extremely quick at it. By the time I got to be about 12 or 13, I got to be faster than my dad. It was great for party tricks where you’d give me two numbers, and then as long as you give it to me, and then start putting them into the calculator, once I’ve heard it, I could beat the calculator up to a pretty decent size number. All the sudden, it went from a party trick to something that I found out in sixth or seventh grade that I had somewhat of a talent for. I really enjoyed it, so I said, “Hey, I should put my energy toward this.” At the same time, I started getting interested in computers. Again, we didn’t have much in the way of money. One winter, I asked my mom if we could get a Texas Instrument TI-99/4A Computer for my birthday and for Hanukkah. We were in a mall in Long Island. She totally talked me out of it — what a silly idea it was. Then at holiday time, it appeared. She heard it, and she ended up getting it for my brother and me. We ended up getting into programming that way. I ended up doing projects in school on computers. I won the Brooklyn Science Fair, joining the New York Math Fair, and various other competitions that I was doing for programming. I was in the local paper a couple of times. So, math and computer science just became my thing, and I enjoyed it very, very much. I enjoyed it, even to this day, in terms of even recreationally, emulators, different things, some of the computer history, and those kinds of things. It was a very informative part of growing up for me.

Alejandro: Very cool. Now, going back to Harvard. When you were at Harvard, you had a buddy that came in and suggested something that focused very nicely on your professional career. What happened?

Craig Unger: Yeah. This gentleman was very impactful on my life. He was three years older than I was, and he actually was my course assistant my freshman year. I was a freshman, and he was a senior. When he left, I later found out he went over to Microsoft. But when he left, he also suggested that I become a course assistant for this class. So, I ended up spending three years teaching at Harvard as a course assistant, and that was my job while I was there because I was on a job-study. I needed to hold a job, it and was a great job, and I love teaching. Well, when I was a junior doing the job that this gentleman had done before, I randomly saw him at the Harvard Science Center, and he said, “I’m here from Microsoft, and I’m recruiting, and you should consider coming out to the West Coast to Microsoft.” As I described, we didn’t have a lot in the way of extra money around for traveling and things like that. I had never been west of the Mississippi growing up, so I thought it sounded like an amazing opportunity and a really interesting prospect. So during my junior year, in the winter, I ended up flying out to Seattle, and I was interviewed. I actually flew out to interview for a programmer, and before I even had my first interview, they changed the agenda to be what’s called a program manager at Microsoft, which is a technical product manager, somebody who listens to customers, and writes recommendations, specifications, and those things. I ended up interviewing, and it worked out. I did an internship in the Microsoft Excel team working on a feature called The Solver between my junior and senior years. Then I went out to Microsoft fulltime because I loved the experience, and I loved the area.

Alejandro: Especially during the interviewing, you met Bill Gates, himself. Tell us about that.

Craig Unger: That was actually after I was a full-timer, but when I was early on in my career, probably two years, no more — I spent 21 years there. I was contacted by one of Microsoft executive recruiters, which is particularly strange since a) I wasn’t an executive, and b) I was already working at Microsoft. The reason was because Bill Gates was thinking of his next technical assistant, who works closely with him on technical matters. So, he interviewed me, and I spent an hour talking to Bill in his office, which was fascinating because most people only interact with him in the board room, and I interacted with him in the boardroom after that many times. I did have the ability to sit down and talk with him, which was a lot of fun. It was an interesting point in my career because I had just started. I was fairly young, but I had just started as the general manager of the Microsoft Access team. I was managing that product for Microsoft, so it became a very interesting discussion about, “Should I stay on managing that product and growing it, or maybe go and work for Bill.” The decision was made to keep me on Microsoft Access, and I spent five there and grew that business. But it was a great experience to have.

Alejandro: As you were saying, interactions in the board room or these discussions that you had, I’m sure that looking back now that you’re an entrepreneur, you’re probably taking some tips or some of those things that you learned, that you saw with Bill Gates as a source of inspiration for yourself in your own journey. What do you think has made Bill Gates who he is today, and what were some of the things that you saw during those interactions?

Craig Unger: Bill was an extremely motivational leader for me. He was the top person, of course, of the company, but he was also the most impactful that I ever interacted with during my 21 years there. I think if I were to say why, in short, I think he had and has an incredible ability to synthesize and take in data. When you combine that with such a powerful intellect, he’s able to generate insights at a pace that’s very difficult for other people around him to follow. I think that was probably the base-level of what I came to appreciate about him. But further than that, I thought from a leadership-style perspective, while he was very tough on people, I found him to always be very fair. One of the things that I try to immolate that I think I learned from him was the idea that you could come in with a position to challenge those around you, but when they present you with a preponderance of the data, truly brilliant people are the first to shoot down their own proposition once they’re confronted with the data. I found that Bill Gates had no problems doing that. He would be the first person to take in the data and say, “Okay. I’m going to change my mind here.” But if you fed him bad data — you wouldn’t want to do that, and you wouldn’t want to try to lead him down a path, which wasn’t the right path, because then he would challenge you and sometimes, it could be a little bit harsh, but nothing beyond what you would expect at that level of company, and he was a fantastic leader.

Alejandro: Obviously, 21 years gives you time to interact with a lot of big players. Microsoft is one of the most incredible companies in the past years. There’s one call that you received in 2007, also internally, and you were recruited to a different team in Microsoft by one of the guys that everyone now recognizes. So, who was this person?

Craig Unger: When I had finished, I had done a job for about six or seven years, helping to build Microsoft’s Cloud infrastructure. At the end of 2006, I was recruited by Satya Nadella, who is the current CEO of the company, but he wasn’t at the time; he was leading Microsoft’s business applications, which was our CRM and our ERP systems. I was recruited for interviews with a number of external candidates. It was an interesting interview process because the interview was all of my directs. It was all the people that would be reporting to me. I ended up getting that role as the General Manager of Dynamics CRM. It was a version 1.0 of the product, but the marching orders were to build Dynamics CRM into Microsoft’s first enterprise online product. So we shipped Dynamics CRM in April of 2008. That’s Microsoft’s first enterprise online product a couple of years before SharePoint, and Microsoft Office were actually shipped. At that point, there were only consumer services like Hotmail and Messenger. That was a fascinating period of time. It was far before Azure was announced or available. So, we were trying to build all the infrastructure that would support an enterprise cloud service at the same time that we were trying to build that service. It was an amazing experience.

Read More: Oren Zaslansky On Launching His First Startup With $1,000 And Raising $70 Million For His Latest Business

Alejandro: Satya took the reins of the CEO, and he definitely turned it around because, with Steve Ballmer, it was a period of being flat, especially on the stock side of things. Now, Satya took over, and it has gone through the roof. What was it like to work directly with someone like Satya?

Craig Unger: I would say Satya has a lot of the same characteristics that Bill has, but in a more user-friendly package in the sense that he also has a tremendous ability to synthesize data. He also knows where to go get that data, and he’s able to synthesize quickly into very insightful decisions. Satya, in addition, has the ability to motivate followers personally because he’s personally a very approachable individual, and he’s also extremely genuine and a very likable person. He has all that going for him, as well. It was great to work with him. Also, he was put into several leadership positions before he took on the CEO role, and it was great from the perspective of an employee of the company to see somebody with those characteristics that were actually rewarded and were able to move through the company because, oftentimes, you have the strongest voice that ends up getting heard, and sometimes, they’re not the best one that does the job of building teams or building consensus. Satya always had a great balance of all that, and I’m really happy to see that it was rewarded, and I’m sure that Microsoft shareholders are very happy to see that it was rewarded.

Alejandro: Absolutely. Then, after 21 years at Microsoft, you decide to go at it at 44 years old. You go at it, and you start your first business. What happened?

Craig Unger: Yeah. I planned to do it a little bit earlier, and in the spirit of being completely transparent, I had some personal issues that made it difficult to do. I went through a divorce when I was in my late 30s, and that waylaid my plans to be an entrepreneur. It was an issue of contention between my ex and me. It wasn’t an issue or anything like that, but it was something that was always there, and it was something that was difficult to get past. Once we were divorced, I still didn’t do it immediately because I had young children. My kids were both under four years old when I was divorced, so I had to spend and wanted to spend a ton of time with them. I had the daddy bag. You name it, I had all that, and I was focused on the kids and setting up a great life for them. Once they started to get older and things started to normalize, I said, “Okay. Now, it’s time to go and pursue this ambition and this dream.” So, yeah, I did leave in October of 2012, and then I took some time to go through some different ideas. I had some friends at Microsoft that were giving me feedback on the different ideas I was sorting through. Then, a few months later, I decided, with a co-founder who I knew at Microsoft, to pursue the company that became Azuqua, which we worked on for five years together.

Alejandro: What ended up being the business model of Azuqua?

Craig Unger: Azuqua was a low-code environment and an integration environment. You can think of it as a Cloud Fast Time-to-Value version of products like Boomi or Mulesoft. You could think of it as similar to a Zapier, Workato, or Tray.io if you know those companies. Basically, it’s like a box-narrow environment where you can specify the data source, and that could be from Salesforce or NetSuite or SAP. We have 250 connectors. Then, very low-code data transformation. You can do all kinds of filters and functions to move your data into the right format to then move it through the pipeline to the next source. So you can write these workflows that are very, very low code in a simple way that can be done by business analysts instead of having somebody to have to code it, so you get greater agility in the company, and that’s what Azuqua was trying to solve.

Alejandro: Then how do you guys go about financing the operation and scaling up?

Craig Unger: We were in a Techstars program in 2013, and coming out of Techstars, about a $400,000-dollar Seed Round, which took us through a year. Then, in the next year, 2014, we raised a Series A with a local venture capitalist called Ignition. That was a 5-million-dollar venture round. The funny thing is, at least in Seattle, that was one of the larger ones if not the largest in the entire year. Now, as I’m sure you know, Alejandro, 5 million dollars is pretty small for a Series A if it’s a Series A at all. So, things have changed a lot. We raised that, and we shipped our product and started growing the business. We had some nice top-shelf clients: GE, International Monetary Fund, Procter & Gamble. We grew a couple of years further and then raised a Series B, with Ignition coming in pro-rata. Also, DFJ from the Bay Area, and Insight from New York. We raised just around 11 million dollars there. Then, we grew the business a bit more and ended up selling it in March of 2019 to Okta.

Alejandro: Wow! How was it like for you, as well, because here you are coming from Brooklyn, from a 350-square-foot apartment growing up? All of a sudden, you start seeing all these millions being invested here and there. In the beginning, were you a little bit scared of the movement and all those zeros bouncing back and forth in front of you?

Craig Unger: Absolutely, because at Microsoft, I had run some large businesses, but the closest you get to the money is seeing a budget in an Excel sheet. You see the money moving around a bit here and there, but you also know that you’re covered because you’re in a company with large coffers and the ability to take risks. It’s really different when you’re triangulating the risk that you’re taking with how cash is moving, and the people’s lives who you’ve recruited and gotten excited about the mission you’re on. Also, thinking about all the alternatives and how they can impact people. That is very sobering, and it focuses you. It makes you very focused on making sure that you’re working on the right things, and that you’re doing the right combination of taking risks, which is what a startup does. But also, finding those places where you can focus and reduce risks to make sure that you can elongate the time period where you can follow this dream, and follow this idea. It is an exercise in cognitive dissonance when you do a startup. Anybody who does it will tell you that one day you feel like you’re the king of the world, and the next day you feel like a perennial loser.  It’s just a question of are there more good days or more bad days? That’s what you sign up for, but then when you look at it as a retrospective, that is what makes the experience. As you go on, you do get more comfortable with it, but it takes a certain type of person. It’s like anything else; it takes learning. You have to learn how to thrive in a different environment in order to do well in a startup.

Alejandro: Absolutely. In this case, the outcome was quite successful because the company was acquired by Okta. What were the terms of the deal?

Craig Unger: It was a pretty simple deal, mostly a cash deal, 52.5 million dollars. The company did a good job of retaining the talent. My co-founder is still at Okta for a couple of years. I probably would have been myself, but I had left about a year before wanting to do another startup, which became Hyperproof, the startup I’m engaged in right now. Otherwise, I’d probably be there too. Okta seems to be doing a great job, and it is a great company to work for from the telling of all the folks that I worked with there that are quite happy.

Alejandro: When it comes to co-founders, I know that’s one of the most important decisions that one makes. In this case, with your previous companies like with Azuqua, you learned some of those dynamics with co-founders, especially if it’s a little bit bumpy, and some of the dynamics, and how that effects at a board level. What would you say are your biggest two or three lessons, and perhaps those that you’re willing to share with people that are listening when it comes to finding a co-founder and making sure that you’re doing the proper recruiting type of measures or things rather than just jumping blindly at it because of the enthusiasm.

Craig Unger: That is my first lesson, which is, there are a lot of people hooked together as co-founders because they share the same enthusiasm for a particular idea. But I think that is not a good reason. Or a way to say it is, it’s necessary, but it’s nowhere near sufficient in order to pick a co-founder. Obviously, you want someone who is excited about it, but that’s table stakes. If the idea is one that passes muster, then there will be a lot of people out there who will be excited about it. That’s one lesson, and you’re going to have to dive a whole lot deeper than that. The second one is, startups are full of highs and lows. Thinking about, during the periods when it’s darkest, who do you want next to you, and how do they process challenges? How do they make decisions? Is it compatible with your style? Oftentimes, you hear that picking a co-founder is a little bit like getting married to somebody, and it really is. You will likely have more disagreements and skirmishes with your co-founder than you would at home. That was certainly true of us. So, the question is, how do you get through it? Are you able to get better at resolving issues of great importance for the company as you guys grow and grow the company? You have to make an assessment of whether you and your co-founder can actually grow together in that way. Then, probably the last thing, which was certainly a lesson for me was more around skill set. My co-founder was very talented at Azuqua. But at the end of it all, I think he and I had very similar skill sets, and I think what happened was, we both thought we were getting complementary skill sets in one another when we were actually getting similar and important skill sets, but it left some really important areas of the company with less coverage than we needed. I think understanding how you’re going to get that coverage, and also being able to be completely transparent with one another about what you as founders are good at and what you need help with is one of the most important things toward the success of the company. I think that’s another key attribute to have when you’re picking a founder.

Alejandro: Absolutely. Tell us about Hyperproof, which is your most recent chapter and is your new baby. What happened here with Hyperproof? How did you bring it to life? What was that process like?

Craig Unger: Hyperproof came from a series of experiences I had, one of which was at Microsoft, and I wrote about it on the Hyperproof site as a founding story. Basically, Microsoft had an issue where one of our marketers had said that Windows Live ID, which was called Passport at the time and was our main ID system, was secure. To make a very long story short, you really can’t make blanket claims like that. Microsoft kind of ran afoul with the government. After a series of discussions, Microsoft and the FTC had agreed to do a 20-year consent decree — this was back in 2002, where Microsoft agreed to some very deep standard operating procedures that Microsoft had to abide by with a very significant fine structure if those were not carried out. So we had to undergo audits every two years, and they were very deep, and they stopped a lot of our progress and development because we were so focused on making sure the audit went well. Between that experience and a similar, although smaller-scale experience that I had at my first startup, I looked back, and I said, Alejandro, no matter how big a company, no matter how small a company, there’s no good way to prepare and manage your compliance process. It always seems to be a very reactive type of a process. There are no tools for it. It’s very hard to find the data you need, and it’s difficult to get what you need from folks that you need it from because I don’t necessarily think about compliance. So we started thinking deeply about what’s a better way to do this? To make a long story short, the founding hypothesis behind Hyperproof is that the world is ready for a new type of business application that is focused on compliance. If you ask the Head of Sales what their system of record is, they’ll tell you it’s a CRM system. If you ask the CFO, “What’s your system of record?” They’ll say it’s an ERP system. If you ask CSO or head of Compliance, “What’s your system?” In almost all cases, they don’t have one. They’re just either taking existing tools and trying to tie them together and try to get some productivity out of spreadsheets, and emails, and that type of thing. But they don’t have a system of record, and that’s what Hyperproof is. It’s the world’s first business application. It’s a signal source of truth and a system of record for your compliance activities done in a modern Cloud SaaS way.

Alejandro: Very, very cool. You guys are still at an early stage. You just raised some money. You raised three million so far for the business, so still at the early stages, but I’m sure that you guys are not going to have any issues because of the previous exit that you have under your belt. I know that people probably think of a seed stage or a seed round as being super easy, but in your case, I think that you had a few challenges. Not only the fact that you were having your first round in place, making sure that the structure was right, that the right people were coming in. But also, for you as well, perhaps quite a learning process because on the last company and also on the last experience, it was more on the engineering side. Here, you’re taking the reins as the business guy. So, how was that for you?

Craig Unger: Absolutely a challenge and something that I really wanted to step up to. One of the things that was different when we raised about a year ago, our seed round was just the environment around that there’s been so much growth in the Seattle area, so much growth, Amazon self-driving a lot, that the cost structure itself is quite different. When I did Azuqua, we used to think, “I’m so happy I’m not in the Bay Area because we can actually do this a little cheaper. Certainly, Seattle is still a little cheaper than the Bay Area, but it has gotten much more expensive, which affects everything. It affects what you have to raise, and some of those pieces where our seed round was $400,000. For Azuqua, we raised a three-million-dollar Seed Round here, and I wanted to be agile, and I wanted to make sure that we reserve institutional money for the right period of time in the journey, so I decided to raise three million from seed investors. Which actually, you would think it ought to be very challenging. I think I was fortunate — good connections, track record, etc., so we were able to raise three million dollars quickly. But absolutely, the other piece that you’re mentioning, Alejandro, right now, me taking the reins for both the product and strategy-side, but also sales and marketing is very significant. It presents some of the most significant personal growth for me in this role. It’s the area that I go after new learnings and new data incessantly because I don’t necessarily believe that I come with that data as part of my experience. I have 21 years in the product side, so it’s been great. I’ve been learning quickly, and we’ve been putting systems in place to make sure including advisors and other things to make sure that we’re getting the right learnings on sales and marketing and how to progress that part of the business at the same pace. I think, at the end of the day, a startup is like cooking a meal. All the different pieces have to be ready at the same time. Otherwise, you’re burning money, let’s say on the product side if Sales and Marketing isn’t ready, or the opposite. Getting the confluence of things to happen is the absolute challenge, and what we’re focused on here at Hyperproof right now.

Alejandro: Very cool. Craig, one of the questions that I typically ask the guests that come on the show is — the journey that you’ve had is amazing, personally, professionally, and all the experiences and the lessons learned. If I were to ask you if you had that opportunity to go back in time and have a chat with that Craig that was still working at Microsoft and dreaming, what would that be when you were to launch a business or thinking already about giving your notice and launching a business? If you had the time to go back and have a chat with your younger self and give him one piece of business advice before launching a business, what would that be, and why, knowing what you know now?

Craig Unger: That’s a good question. Probably, the biggest two pieces of advice I’ll answer, one would be to get started even earlier, which I don’t know if that’s what you expected to hear, but I started post-40, and I think it would have been good in the environment to start earlier and get that experience earlier. I would also tell myself that the first experience you have as an entrepreneur doesn’t have to be a knock-it-out-of-the-park success. I would try to outline to my younger self that it’s a journey. So, get started early and treat it as a journey, so that you can get the experience, and you could make yourself a better entrepreneur. That’s the key piece. Then, the other thing I would tell myself, which I think I’ve done an okay job, but I think it’s always a lesson that’s worth reiterating is that don’t ever start a startup just because you want to make a lot of money or see your name in lights. Those are the wrong reasons to start a startup. If you can get those things, it’s great, and we all hold them as goals at some level. I’m not saying any different, but the main reason to start a startup, in my mind, and the thing that will actually get you through the hardest times and the darkest nights is when you realize that you’re working on something that you believe has to exist out in the world. It just has to exist, and you’re the one that wants to be that person that brings it to the world. If that’s the reason why you start a particular company, and also, if you’ve already decided to start a company, and you use that as the way to filter your ideas so that you don’t just look at market potential and some of those other things in the trendiness, but you say, “This is something critical. It’s change that I want to bring to the world.” Then, you will survive both the tough times and the good times. Then you’ll have a much better chance of success because you’re doing it right reason. I think those are the critical lessons that I would make sure the younger me understood.

Alejandro: That’s amazing. Craig, thank you so much for that. For the folks that are listening, what is the best way for them to reach out and say hi?

Craig Unger: You can email me at [email protected] — I’m happy to discuss anything that we discussed here and other topics. The startup community was very generous to me when I was first coming out of Microsoft, and I love to pay it forward and be a part of that community. So let me know if I can help.

Alejandro: Amazing. Craig, thank you so much for being on the DealMakers show today.

Craig Unger: Thank you, Alejandro. I very much appreciate it.

 

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