Vanta's Path to Product-Market Fit — Solve the Customer’s Problem, Then Write Code

Vanta's Path to Product-Market Fit — Solve the Customer’s Problem, Then Write Code

An inside look at all the unconventional moves in Vanta's first few years — from creating a new category to signing the first 600 customers without a proper website.

EXPLORING IDEAS

It was June 2010, and Cacioppo had just started a job at New York-based early-stage VC Union Square Ventures, where she spent her days meeting with innovative founders and evaluating companies.

“Going into my VC job, there was a part of me that did want to start a company one day, but I definitely didn't say that out loud... it seemed like I wasn't the sort of person who started a company—whatever that meant,” says Cacioppo.

Eventually, as she witnessed the wide variety of founders who passed through USV’s doors, her confidence in becoming a founder herself started to bubble up.

“I got to the point where I said, ‘I do want to go start a company.’ But I wanted it to be a software company, and I didn’t know how to code. And I knew a lot of non-programmers started companies, but I didn’t want to go that route. So I resigned, took my bonus and taught myself to code and build products,” she says.

For two years, she tinkered with software projects. She built a book tracking website, a video messaging app for Android and a startup job board, just to name a few. But there was a missing piece. “I learned how to make things on my own, which was great, but I'd never worked at a real company building and shipping products before,” she says.

So she ended up joining Dropbox as a product manager and worked on bringing Dropbox Paper to market.

Zeroing in on the Right Problem to Pursue

“Voice was new and opening stuff up... I also knew some things about team collaboration after a couple of years at Dropbox. So I figured I’d merge the two and build a voice assistant for work.”

This sent her down a rabbit hole of what she admits now were “terrible ideas.”

First was the meeting recorder that automatically transcribed all meetings across a company. “It sounds neat, and some people really wanted it, but the average person doesn't want that product at all.”

When her products failed to gain traction with startups, Cacioppo switched gears and honed in on a novel use case: a voice assistant for biologists working in a lab... “But the market for this was the size of my thumb and I didn't even know anything about biologists. It’s funny to talk about now, but it was a true low point at the time.”

It was a bit like the children’s book “Are You My Mother?” We had built this tool and then walked around to people asking, “Do you want our tool? Do you want our tool? What about you?” And the answer was no—no one wanted our tool.

...“We decided we weren’t allowed to build anything at all. We had to just talk to people—and talk to them until we had a lot of confidence and a mental model of customers, their jobs, the problems they might have and how we might solve them.”

The Aha Moment

“The best parts of my week are when I get to work with product teams on security issues... the worst part is when I have to pull together reporting on the things I've done...”

Compliance kept coming up in other customer discovery conversations — it’s a broad space. To further narrow down an idea, Cacioppo asked, “What are you doing for security at your startup?”

The answer was often, “Not that much, and I wish it were better.”...

By the way these startups approached the topic, she pieced together a theme: It was a matter of prioritization... they were choosing to focus on product features instead of security, which led her to realize a need in the market.

...Cacioppo met a small startup that broke the mold. “There was this transformative moment when I walked into Figma ... and I was talking to one of their infrastructure engineers... this person listed about 12 tools and a bunch of best practices.”

BUILDING THE MVP

In their first experiment, they went to Segment and interviewed its team to determine what the company’s SOC 2 should look like and how far away it was from getting it.

Cacioppo was running a test to answer two key questions:

The answer to both questions ended up being “yes.”... “We had this gap assessment spreadsheet that had been useful for three startups, and word of mouth was spreading.

Y COMBINATOR AND EARLY SALES

In January 2018, a few months after Cacioppo and her team had started writing code for Vanta, they got accepted into Y Combinator.

I had no selling experience whatsoever — the last thing I sold prior to starting Vanta was Girl Scout cookies.

Being a member of the popular accelerator opened up a network of fellow YC founders. “From those early sales pitches, I learned three important lessons:”

RAISING A SEED ROUND

In the spring of 2018, Vanta graduated from Y Combinator and decided to raise its Seed Round. “It was ‘easy’ in that we had the momentum of coming out of YC,” Cacioppo says.

By April 2018, Vanta had closed on its Seed Round, but it would be a full three years before it raised a Series A, amassing $10 million in ARR before doing so.

GAINING TRACTION

Vanta started steadily acquiring one new customer per week. “It was so exciting just seeing that velocity there and being able to look back and be able to say, ‘Oh, remember when it was one a week and now, it’s three a week?’”

... At this point, the team consisted of engineers and Cacioppo, but now that they had this internal confidence that they’d found product-market fit, they hired a support team, then customer success and lastly, sales.

RAISING A SERIES A (FINALLY!)

In May 2021, Vanta raised a $50 million Series A led by Sequoia Capital. With that funding, the team accelerated hiring, invested in marketing ... they also announced support for two highly-requested certifications, ISO 27001 and HIPAA.

LOOKING FORWARD

Since 2018, Vanta has grown from manually assisting that first SOC 2 submission... to automating compliance for many more frameworks,... “I'm re-centering on a lot of the founding pieces of Vanta,” says Cacioppo.

With its first acquisition, $203 million in total funding and more than 5,000 customers, Vanta is continuing its move upmarket. For acquiring enterprise customers, here’s what’s worked for Cacioppo:

A decade later, Cacioppo is truly bending that story’s arc as Vanta furthers its mission: restoring trust in the internet.