
Bain Capital Ventures’ Kevin Zhang: The ‘Unlockable Potential’ in Lending, Investing, and Insurance
Kevin Zhang, partner at Bain Capital, assess the technological tailwinds for emerging players in lending, investing, and insurance....
Kartik Gupta~quoteblock
In annual surveys of enterprise tech leaders, a majority of respondents still see the migration of workloads to the cloud as a top concern — 57% in the 2022 survey shown above. Gaining efficiency in their use of cloud computing and moving to SaaS round out the top three concerns.
At this point, we take it as commonly-accepted notions that the majority of enterprises are moving to the cloud, that virtually all large enterprises invest heavily in capitalizing on the data that resides within their organization; and lastly, that cybersecurity has risen to securing a place in each board’s agenda as attacks become intense and more frequent. But that’s not necessarily the case. We’re a bit biased by being so close innovation, to Silicon valley, and to F500 CxOs, that we forget that massive organizations around the world are still treating the cloud as a new technology that they are still learning and exploring.
I think the 2020s are going to be the best-ever decade for data and cybersecurity, which until now have been part of the broader support structure, but never core foundational pillars upon which enterprises are built — or fall because of. This is will be the byproduct of significant cloud adoption, which should result in most organizations have majority of their infrastructure in the cloud.
Enterprises used to buy outside data and security tools as bandages for something that was failing or as isolated fixes to patch into a specific part of a workflow Now, as cloud adoption reaches maturity and the infrastructure fabric of organizations changes, we’re starting to see enterprises change their behavior and turn to partners and SaaS-type solutions for meaningful parts of their infrastructure. Compared to the last two decades, companies realize that, while they may want to own the whole stack at some point, achieving scale doesn’t require them to build everything.
We’re also starting to see this idea of "the stack" and collaboration within it become a super-powerful driver of messaging and go-to-market. Companies are working very closely together, as they focus on what they do best, to bring together sets of solutions that really work for the end user and play well with other components up-and-down the stack. The modern data stack is the best example of this trend, and one that will shape how partners and competitors alike define one another in the modern era.
Q: How do existing trends across the data stack support the thesis that new software will be more “human first,” haven’t we already seen multiple waves of innovation here?
A: "A lot of the stack that exists today was built to make the IT user happier by helping them move on from incumbents like Informatica and IBM. But, on the whole, analysts and managers have been a few tiers down the priority list of users to keep happy. What we’re seeing now is that almost all major parts of the data stack are being rebuilt with the end business user in mind as first priority, while making sure the product checks all the boxes for IT and security to be happy and to stay compliant.
New tools are adapting to the realization that every part of the stack needs to feed data and metadata in a way that every user can understand the underlying context and trust the data. Not to mention, most companies in the modern data stack are building excellent APIs to be used by others, while also working directly with other vendors to make integrations and workflows a breeze. All this only comes together when you put the end user first, not IT or the CIO."
Q: Recent trends in security like new access-control and identity-verification and management solutions certainly seem responsive to the end user. What’s missing?
A: "Security is still treated somewhat as a hardware, network, or software problem — even though the human element is one of the biggest risk contributors. Training and monitoring people turns out to be much harder than expected. Yet we know failure can have negative consequences.
Historically, access, identity, authentication etc. were very IT/compliance focused. However, with the rise of SaaS and Cloud, we’re seeing identities be more fluid and more ephemeral. This, in combination with the fact that people are using apps that aren’t on-premise, we’re seeing security teams starting to own this problem more, instead of IT. Forward thinking security teams are now taking a more human-first approach, where security can exist in the background to keep you and the business safe while enabling you to be productive without closing many gates.
One example tackling part of this new identity realm is Elevate Security, which is helping organizations understand and proactively remediate human risk and educating employees continuously and in response to real needs, rather than with yearly compliance training. Companies are also rethinking what it means to have a digital identity and how online authorization and authentication can evolve alongside organizations in a dynamic and adaptive way. These approaches take into account the reality of human behavior, and build solutions to incorporate them as product features rather than leaving them out as edge cases."
Kartik Gupta~quoteblock
Q: What are some illustrative examples of companies, within your portfolio or not, which are representative of this trend?
A: "Wiz is an excellent example of how cloud-adoption maturity has given rise to a massive new cloud-security market, and how organizations are changing their buying behaviors. In a previous era, these products took six to nine months to develop into a proof-of-concept and then another few months for budget, security, and contract approvals. Wiz has helped change the game in terms of industry behavior. It has brought down time-to-value to hours or days in addition to sales cycles that take months not years. Also, similarly to Snyk, Wiz has been able to rally security practitioners within enterprises to go bottom-up in advocating for the tool, while still perfecting the top-down sales muscle when it comes to closing seven-figure deals. That combination is going to be very important for the next generation of data and security companies.
Monte Carlo, DBT, Atlan and Astronomer are all companies within the modern data stack that are going very deep within their markets while working closely with the rest of the ecosystem. This ‘better together’ story resonates and sells extremely well and results in the best outcome for consumers as well. The broader data market is mature enough today to support billion-dollar companies within sub-buckets, as these companies can partner knowing that they won’t necessarily be squeezed out by tangential competition in the long run.”
Kevin Zhang, partner at Bain Capital, assess the technological tailwinds for emerging players in lending, investing, and insurance....
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Technology, innovation, and the future, as told by those building it.