 From our studios in the heart of Silicon Valley, Palo Alto, California, this is a CUBE Conversation. Well, welcome to this special CUBE Conversation here in Palo Alto, California. CUBE Studios, I'm John Furrier, host of theCUBE. We are James Siegel, president and co-founder of Open Path Security, hot startup 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, has 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, great, you have a great background. We interviewed theCUBE before, been CUBE alumni. Before we get into this, this is super important area. I wanted you to take a minute to explain what you guys do, how long you've been around, what is Open Path? Sure, so, you know, my partner's and I are serial tech entrepreneurs out of LA. This is our fourth company together over the last 20 years. You interviewed me when we were running Edgecast, so it's great to be back. You know, Open Path 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 use to enter our prior buildings. This is actually my business partner's badge pack just to get in and out of our offices. We were basically tired of wearing dog tags or dog collar, however you want to collar, right? The whole idea was you can use your phone. Your phone is your key, and so the credential to get into the office, into the buildings on your phone, and mobile was a technology that hadn't really been introduced into the physical property technology space before, and by bringing mobile to bear, as well as cloud technology, because all the software's in the cloud, we were able to improve this value proposition and offer a cool solution. So just quickly, how long have you guys been out of the product, and when was the company founded? So we started the company three years ago and launched commercially about a year ago. We spent two years building the technology, getting our patents, really getting everything figured out. We have software and hardware that'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 in saying, finally, somebody figured out how to get rid of the badge and use my phone to sort of let me in. And since then, we raised a good amount of money and have been just selling to basically everyone. Yeah, congratulations. It's a hot story, so I want to get into it. So the origination story is, obviously you had to be a success entrepreneur in the past, being a serial entrepreneur that's ups and downs, but with the cloud, everyone thinks, oh, security's just a cloud problem. You guys are attacking a physical property, physical security, kind of bringing a DevOps ethos to this. I mean, hold those badges up. It reminds me of the old janitor key ring. This is the digital ring, all your access. So clearly an opportunity to automate. So clearly kind of the cloud mentality here, but your impact is to kind of an older industry. Explain this trend of property technology. I mean, most people can relate to their office space, waving the badge to get in, maybe VDI on the desktop, or whatever's happening. I mean, talk about the marketplace and the trend. So buildings, real estate for the most part, are very sort of slow to move and adopt 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 tech, so this works. It's an RFID badge, and you can use it, and people are comfortable with it. It's worked for 40 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 multifamily residential, healthcare, any building you really go to. And so there's a lot of money, and there's 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 go into a hospital, when I go to school, when I go to work. And that's really what we're 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. You think about a big company, you sign in, you onboard, get your laptop and get your badge. Someone probably enters your name into a database. And then if you leave, that's going to be deleted. As you guys addressing that area, talk about that piece of it, because I think this is more real time, more personal with the phone, for instance. You're bridging the physical and the logical. Talk about the IT versus, you know, 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 a real estate person. And they're in charge, at least within the enterprise, of thinking about physical security. But what's happened is, there's 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 and the bad actors who want to steal your data or hurt you. And so, all this money has gone into cybersecurity. The chief security officer, the IT department, they have unlimited budgets to go out and solve that problem to protect the network. But they're literally leaving the front door open. And so, a lot of what's happening today in the enterprise is that the CISO, the chief security team, the IT team, is starting to really gain domination over this real estate and facility 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 to my access control system and how people enter the building. Access control is also an IoT problem, industrial IoT. We hear that area. Clearly a use case for this opportunity, so clearly a good reason why you got some funding. And I want to cover that in a second on a Regenation story, but the question I have for you is when you guys started the company and now that you're in market with customers, what's the main problem that you solve? What's the, you have to solve that one problem. What problem do you solve and where's 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 are 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 you're 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 new office, you need internet connectivity, right? You need to have access control, maybe an alarm system, sparklets, water, 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 going to choose open path. The second group we talked to are folks who 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 workspace and access control technology, it becomes an incentive for folks to want to come and office in your space. So you and I are techies. We love to buy the shiny new toy. The property type tech world, they're not as innovative or have a propensity to just jump at the next thing because they don't want security, they don't want 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, I started with Wi-Fi. If you don't have Wi-Fi, 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 to and so that they like in terms of features with access control? What is it enabling from a value standpoint? Is it differentiated services? Is it access to certain amenities? You mentioned some of that. What are 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 your 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 a 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're used to now and there's a pushback that people want a little bit less friction even though they want that higher level of security. Not that I want to get a doomed day scenario. You mentioned 9-11. They were told to stay in their buildings when they could have been evacuated. Everyone in New York kind of knows that tragic story. Huge active shooter environment right now is just my kids went to an event in San Francisco. Literally, what's on the mind of people is, oh my gosh, there's going to be an active shooter. These are examples of things that could go wrong. In security, this becomes the 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 something's happening? Let's just say an active shooter comes into a building. Yeah, so we 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 nowhere near the fire alarm, which is where the lockdown button might be as well and you're stuck in a closet or hidden away trying to make sure you're not going to get shot. If you have your phone on you, you can enable a lockdown. And because our plans are kind of 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 that the faster the first responders can get to the problem, whether it's an EMS person that's trying to stem the bleeding on somebody who's injured or whether it's a SWAT team that don't know. Well, that's actually proven. You saw Gilroy, you saw the response and Dayton, literally minutes ticking down those doctors. Well, every second counts. And 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 integrations 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's doing real time from the video systems, they can take over the video system. So it's a pretty- So it augments the physical security environment for good and bad scenarios. So let's get kind of the more realistic kind of security scenario. Bume state scenario is kind of depressing, but it's real, right? People are planning and architecting around that. One basic concept that I got reprimanded at VMware was, I've been at the VMware campus since they've been building it, but recently I was going to a meeting and I know it's building number four, whatever it was and I'm sitting there waiting at the door, someone comes out and I went in, they call it tailgating. Turns out I didn't have a badge and the new person who was there was 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 I'm like, okay, you don't tailgate at VMware anymore. I now know that, but this happens all the time. There's another common problem. I could be stealing laptops. I could be getting the plans for a VM role. I mean, whatever's going on, that's bad things are happening with tailgating. That's a big thing, isn't it? It's a big thing. Security experts are telling us that it's one of the top three physical security challenges that enterprise CSOs are running into, tailgating. And what's happening is that people just like you, who are well-meaning, are sneaking in, but there's some bad actors that are sneaking in as well. So we've got technology that we've 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 reader go beep, beep, beep, and send an email alert to either a security desk or to the individual themselves with a video and a picture of the person who's snuck in behind you. That's a great example. And I mentioned VMware in all seriousness, I was at that actually happen, but there it'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 by buildings over, a little bit lazy, but that's the point of the large buildings. This is kind of 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 of 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, Open Path Security, you guys are actually 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 account, product shipping, status. Give us through the numbers, give us the data. Sure, so we started the company three years ago. We came out of 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 million total. We've got a great team of folks, just under 60 employees. We're based in Los Angeles, but we have offices in Indianapolis as well, because why not? That's the best place to be. And we're growing fast. We actually sell focused on commercial real estate, but have expanded to multifamily residential, also to schools, churches, houses of worship. And we're here in the U.S. now and we're growing internationally over the next two or three years. And the product is a SaaS, bandaged service, physical. What's the story of the product? Yeah, so there's a combination of physical hardware, but there's 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's 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. And so you get on the spec, I mean the new building. So you have to do a little go to market. You go to market is get in on the design side, suppliers to the building. Yeah, so there's the developers, the architects who put us into the spec. There's 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 to software this nice margin. And is there a cloud play here too? Is data stored in the cloud? Or are you guys handling some of the backend stuff? So yeah, so all of 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's down. Because 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 rings founder at 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 100% 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 think is important that people should pay attention to? There's 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're watching. People are just used to having a nest on their wall or a ring on their doorbell and they want open path 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 then 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 understand they're on the name open path because most people in these kinds 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. Open path security, if it's open, can I hack it? What's the open path name? Tell us why open path, how are you open? Tell us the story behind the name. Really glad you asked. We were really frustrated when we analyzed this space. As investors and entrepreneurs in this category, we saw that all the systems that are out there are incredibly closed. They're proprietary systems. They work on old protocols and they're not open. Ours is open. It's built on open APIs. 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 open path. And that's something that you can't really do in the old physical access control world. And so open is just core to who we are. Do you see that as an ecosystem standpoint? 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 Cameo, 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've got to ask the question. I'm a building person designing the spec for the new campus, like open, sounds insecure. How do you guarantee that you're going to be secure? I'm worried about security. How can my 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. And 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? Now you're James, right? You can go take that, you can get in anywhere you want. But I challenge you to try to use my phone. Try to unlock my phone right now, right? That super computer, there it is. That super computer is encrypted. There's no way you're gonna break that. This is the most secure way to enter anywhere. Well, and if I get, that's right on my phone. So if it was an Android, I'd get some malware on there. But the malware that you get on your Android isn't necessarily gonna allow you to authenticate our system. So even though you might be on an OPE device, you guys are containing the app, the security app on the device. Yes, 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 handoff where we have rotating security certificates on this, as well as in the cloud, as well as on the panel. And 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 with 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 to experience so everybody who's out there who's tired of using a key card and a badge 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 part of sort of how I 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 work. And what's the reason why you're winning deals? What's the one factor or two factor? Ease of use, openness, convenience, features, what's the reason? I love that 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 that you experience personally every day and that the enterprise or the landlord experiencing managing a system, it's 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 10 badges and you can actually just have it all on your phone? It just makes sense. Soon, Siri see funding around the corner. If you're interested, we should have a conversation. The Cube Fund is not yet set up. But when we get the Cube venture capital fund, we'll be. Let's go. If you let me invest in your company, I'll let you invest in mine. We'll talk. James Siegel, entrepreneur, president, co-founder, open pet security hot startup here inside the Cube, featured startup here. Thanks for watching. I'm John Furrier.