In this episode, Jason Niedle interviews Ofer Klein, co-founder and CEO of Reco, discussing the evolution of AI in business, the importance of AI enablement, and how companies can adapt to the rapid changes in technology. Ofer shares insights on the challenges of app sprawl, the need for AI-native solutions, and the future of security in an AI-driven world. The conversation emphasizes the significance of having the right team and strategy to leverage AI effectively.
Takeaways
- AI enablement should be a company-wide process.
- Understanding specific use cases for AI is crucial.
- The number of applications in use is rapidly increasing.
- Listening to customers is key to evolving solutions.
- AI-native companies will outperform legacy systems.
- The right team is essential for successful AI implementation.
- AI is a tool, but people drive success.
- The pace of technological change is accelerating.
- Companies must adapt to the growing use of AI.
- Security must evolve alongside AI advancements.
Sound Bites
“How do we walk, crawl, then run in AI?”
“You need to have the right team for AI.”
“We’re happy to show you how it works.”
BeyondSaaS Transcript
jason (00:00)
Today we’re talking with Ofer Klein, co-founder and CEO of Reco, about how to walk, crawl, then run in the age of AI native business.
Welcome to episode 50 of Beyond SaaS. I’m Jason Niedle, co-founder of Tethos, and this is episode 50, a really special episode for me. So thank you to all the listeners. Today we’re approaching 70,000 views and listens with guests from Taiwan, Finland, Poland, France, India, Brazil, Nigeria, and all around the USA. And we just started four months ago, so I do appreciate all you being here and listening.
And today we get to celebrate that with Ofer. So thank you for being here, Ofer. He is the co-founder and CEO, as I mentioned, of Reco, which is a leader in dynamic SaaS security. And this is an approach that eliminates the ever-growing gap between what companies know how to protect and then what’s actually outpacing their security. So Reco comes out of the box with hundreds of pre-built threat detections, their Reco AI agents, and that supports hundreds of apps. And this addresses all the problems that we all have of app sprawl, AI sprawl,
configuration, identity, data sprawl, so many areas where there’s gaps that Reco can come in and help resolve this. And Ofer has an amazing background, a former helicopter pilot who designed a helmet to help pilots fly in zero visibility using VR and AI. And from there, Ofer has become a serial entrepreneur growing GTM teams with SaaS companies. And I really like the parallel that his company now, kind of like the helmet he designed, now offers visibility using AI to help secure SaaS platforms.
So that analogy and that crossover is really cool. Welcome, over.
Ofer Klein (01:33)
Thank you so much and well presented. Actually, it’s really interesting to see how things are evolving and regarding our topic for today about how to use SaaS and AI in order to grow faster, cheaper, better.
jason (01:47)
Yeah, I think we all can use help in that field and that’s topic that comes up consistently. How do we stay up with the curve here with AI so rapidly advancing? And then the really critical situation which you’re solving is like, how do we solve for the security holes that that inevitably creates?
Ofer Klein (02:03)
Yeah, totally. you know what we see in the market because of this crazy growth of using AI and using Gen. AI, it creates so much value for the business across the board from sales and marketing and product and technology people that of course I’m going to use it. And then you see huge gap that is continuously growing and actually now it’s growing exponentially. We call it the sprawl and the dynamic security that helps it.
If the business is running so fast, the security and IT teams have to basically adopt. And right now the current solutions are falling behind — are legacy, are siloed, they are not built on AI, they are not AI native. And therefore what we have created pretty much two years before AI became cool was how to utilize AI with knowledge graph and machine learning and then on top of that AI, now it’s AI agents as well.
To create some sort of heartbeat that you can understand today and tomorrow as well what is happening why is it happening and how can I fix it on extremely high scale and in real time
jason (03:09)
So I want to know about Reco for sure and you’re intriguing me with this, but before I forget, you have a golden nugget for us, tip.
Ofer Klein (03:15)
Yeah, so the golden nugget is, everybody’s talking about AI. It’s really easy to talk about it and it’s really hard to implement it for the day to day. So the golden nugget I learned from a bunch of other entrepreneurs and now we start to implement it and I totally recommend it is to have the AI enablement process company wide and not just to try to count that everyone is just going to use something and do do better. So we took an approach of
basically holistic view on how we use AI internally, how to become more productive and a much more centralized position than, ⁓ everybody uses whatever tool and they’re gonna be good. So the nugget there is think about it strategically versus tactically. Where do you want to be as a company? What are the use cases that could be automated? You don’t care about technology, you don’t care about the how, what, where you want to go.
What do you need to do? And then approach the experts on help me utilize it for the day to day to solve it using Gen AI and AI. You’ll be surprised how much you can grow as a company and for each person by him or herself.
jason (04:27)
for
me that’s a really important tip because we’re of course looking at how does AI affect marketing and it essentially affects everything in our business. And so we’ve looked at tools and we’ve looked at implementing them. But really I started with the tool and your approach is much wiser. Look at my use cases, be really clear about those use cases and where I should be automating and then go find the right tool instead of saying, here’s a tool, how do I throw it in?
Ofer Klein (04:49)
Totally.
The tools are gonna come and go. Some of them will be the leaders in a specific market. The most important thing, you know your business, you know where you want to go. Don’t think about the how. People from the outside will help you with the how, the tools are evolving, the AI is gonna help you know what you want to solve and how success look like. And then let’s bridge with AI and Gen.AI.
jason (05:11)
Great advice. Will you tease us a little bit about Reco? Tell us more.
Ofer Klein (05:15)
So basically the vision behind the company, we started about four and a half years ago, we took our co-founders from the Israel FBI. The company is a US based company. And the vision behind the company was one day, the number of apps we’re using will grow beyond control. It was early days of COVID, we thought it’s gonna go to a hundred apps. That’s the biggest we could thought, we can think of, and now AI came on board. We have companies with 5,500 apps. They’re adding
like dozens of apps every day. It’s way beyond control and it’s here to stay. And now you see Pat, for example, global CISO from JP Morgan saying, this sprawl is here to stay, we need to address it. And need to address it, the legacy solutions are falling behind because they’re not AI native, they’re not built for such a scale and sprawl. And our goal is basically to provide full visibility, governance and security for the IT and security team.
to run at the pace of the business.
jason (06:12)
Wow. So how are you reaching, I mean there’s an immense need for this, but there’s also immense competition. So how are you reaching out to the companies and how are you distinguishing yourself from all the competition?
Ofer Klein (06:25)
So as a serial entrepreneur, know that you can influence your product, your team, and a little bit beyond that, you cannot create a market. The market now is created because the value is in SaaS, the bad guys see it and start breaching those tools, and the business impact is becoming bigger and bigger. So companies that two years ago couldn’t care less, they were only on prem, now they are going SaaS first. 70% of our business is SaaS. You could even spell SaaS two years ago.
So when this is happening, now the wave is forming. And the only question, how can you be the most relevant and the best solution for your partners and customers and continuously evolve with them? So we listen to customers, we are channel and partner first, and we believe we have the best technology that is suited to solve this problem, which means detect everything you have. We detect close to 60,000 apps a day.
secure those apps, we have by far the largest coverage of apps, and 20x faster to implement new apps, which means every two days we have a new app on board. And the last part, we’re using agents to solve the problem very effectively as well and very efficient.
jason (07:34)
How do new companies find you? You say you’re listening and the value is in the market, but how do you get these new companies to find you?
Ofer Klein (07:42)
Yeah,
so we’re using the traditional approaches like big events to dinners and working with partners. And now the big involvement, as you mentioned at the beginning, marketing is shifting towards AI, towards Gen.AI. So these tools will allow to create better content, more optimized for our audience, and to hit it at the right time with the right people. So we’re
obviously doing digital and creating content that is valuable for our audience instead of hear me out, I’m Reco, I’m the best, you should come in. No, how can you create value that you care about? How can we meet you when it’s appropriate with the right content and with the right solution? So the marketing part is evolving dramatically, right?
jason (08:29)
How do you narrow down your ICP, your ideal customers, there’s, like in a way it’s everybody, but you can’t market to everybody, right? So how do you find value? know, have you segmented into a number of niches? Like how do you hyper-target?
Ofer Klein (08:43)
So the market is never evolving at the same pace for every industry. For example, financial services, they are much more regulated. They have much more to lose if data is breached over their Microsoft Salesforce or Snowflake. So obviously, they are first adopters. On the other side, you have health care. You have pharma. You have those regulated businesses that if shit happens, it’s not a good day for them because of many reasons. Then you have the second movers and the third movers.
As a startup, obviously, that you want to run fast, you start with the first movers and then you go downstream. And this is how we map the size of the companies that are most likely to adopt. We look at our customers and what is good for them and how can we find more of them gradually.
jason (09:28)
I love that you’re able to bring immense clarity to these points right away. So if I ask a more challenging question, the environment is what the environment is. Your clients want what they want. But what inside of your company is your internal constraint that’s holding you back from even faster growth?
Ofer Klein (09:43)
As every company, have like multiple areas that you need to improve on. And each one you choose one, you solve this bottleneck and you move to the next one. Last year in 2024, we grew five X at the revenue. And the biggest thing was growing the basically the sales team fast enough. Now it’s the next level of the partner team, which, is growing and continuously grow the sales as well as supporting the existing customers. By the way.
We say it internally, we don’t have any customers, we have only partners. Which means we look at them not as vendor and customer, you are our partners for the long term, how can we create continuous value for you? So this part is evolving as well, the more customers you have. So it’s like an iteration between product and technology and then salespeople and then the customer success and then it’s iterative as a circle.
jason (10:37)
And when you say you need to grow your partner team, what did you mean by that?
Ofer Klein (10:40)
So we are partner first, channel first, both resellers, service providers, IR threat hunting teams, system integrators. So you always start small because a big partner will never take a risk on you if you are just starting a company. But then they hear about you from this big company and this big company and you won together three times. And now you need a team to support them to go to the next level. And now we need five more of those. So it’s a gradual approach versus let’s boil the ocean.
And we see a lot of success with the channel importance.
jason (11:13)
Absolutely. So we talked about this idea of like walking first as an AI native business and then crawling and then running. What is this kind of, what would we call this growth path that we all need to take in becoming an AI business?
Ofer Klein (11:26)
On AI, you actually see two totally different approaches. You see the legacy companies that as they call it in the Bay Area, trying with AI sauce. Everything is the same. I have an LLM or some whatever chat bot and my life are gonna be perfect. By the way, it might do well for, I don’t know, call centers or something like that. But if you really want to create something different, if you really want to revolutionize your service and the value for the customers, we call it AI native.
In our case, it took two and a half years to build a machine learning becoming AI graph, knowledge graph, that connects people, applications, and data in extremely high scale. Once we achieve that goal, now we can actually add on top of that AI agents that run and crawl on top of our proprietary data instead of customer’s data and solve a specific problem. Another issue we hear across the board
AI agent, can do everything for everyone, which they can’t. It’s solving a specific task for a specific use case, and then you can see the benefit. So for us, it’s detection and response, and threat hunting, and identity and access. It’s very, very specific, and then it can be very successful.
jason (12:43)
So break this down in more of a generic general fashion. What for most companies is the walk stage? Like how do they become an AI business and where do they need to start walking?
Ofer Klein (12:53)
So I think the most successful startups and companies out there are either making a fundamental change to their behavior like Salesforce, agentic force, many have declared no more developers in the future, only AI, etc. That’s a fundamental change of the company because they didn’t start as an AI company. And if you start a company now, you need to really think how can you utilize AI to solve things faster and better?
You cannot do whatever you do and AI because it doesn’t work. Either you’re all in with that or you’re just gonna fail.
jason (13:28)
So walking is figure out that strategy and really like no bullshit, just … commit.
Ofer Klein (13:34)
And then you need to have the right team. For example, we took a top tier team from the Israel FBI and the Israeli NSA, the 8200 unit, that worked on those things on a national level. And then you need to choose the right technology. And by the way, a part of those two and a half years of developing this graph, we switched technology twice because it broke. And this technology evolves over time and you need to make sure that you keep up with it. And then you need to be efficient.
Everybody is talking about the value, but if it costs you 10 X more than the customer is willing to pay, it’s not a good idea. And then once you start running, you need to make sure that you have the right team. Everybody’s talking about AI, which is amazing. At the end of the day, you have to have great people, A plus people that can actually use it to create.
jason (14:20)
⁓
And I think that gets back to your early point of where you’re listening and you’re finding out what their needs are and you’re truly solving those needs but using all the elements that you talked about.
Ofer Klein (14:30)
Yeah, I truly believe in people. I know that AI is amazing and one day all of us are going to be robots or whatever, but people are still making the difference today and your team today and in the future, I still think is the most important thing by far.
jason (14:44)
I go back constantly to the industrial revolution and how all the farmers went out of business and you can see that downhill slide. But then all these new people became manufacturers, right? And now it’s been 150 years or whatever. Well, are we stopping our innovation and manufacturing? Are people gone? Have machines replaced all of us? No, that didn’t happen in that revolution and it’s not going to happen in this revolution, right? And there’s no instant end game. It’s not like, AI is here, we’re all done, right? We have decades of whatever’s going on in front of us.
Ofer Klein (15:11)
remember navigating, trying to navigate to a ski resort in Europe with a map and getting lost at 10 PM at night and saying, what the hell, someone must invent something. And then you have GPS and it’s make your life easier and internet and mobile and now AI. It will make our life faster and easier if we know how to harness it.
jason (15:30)
So we’ve talked on these shows a lot about AI, and then the conversations started coming up around agentic AI. But I wonder as a security professional, if we take it even one further step, what happens in 10 years, or five years, or 15 years, or whatever, when quantum computing is online? How does that impact security and AI, and where do we go?
Ofer Klein (15:49)
Yeah, so quantum is one of them. And even the jumps in AI are not going to be linear as much as we understand and we are working with, the top players in AI and my co-founder is AI PhD that, is a part of the Alliance that try to secure AI as well. It will not, most likely it will not be like linear. It will be more of the same huge jump, more of the same huge jump. And those jumps,
all of a sudden, instead of, this AI is stupid, it just replicates, it becomes smarter. And then it becomes creative. And then it can do more things instead of you. So how can you evolve with utilizing those? And unfortunately, usually the first movers are the bad guys. So using quantum to break into banks or to break into systems. Using AI for fraud.
Usually you have this cat and mouse between the bad guys and the good guys. And unfortunately, almost every time the bad guys are having a few breaches, they’re stealing stuff, ransomware, etc, and then you have solutions. And our view, especially in our case, in SaaS security, how can we be ahead of the curve? Instead of getting breached, I have $10 million stolen, how can we utilize the best technology to prevent this from happening?
jason (17:05)
And so you have to stay constantly on the cutting edge because you have to be ahead of not just the incremental growth, but knowing that there’s some big leap coming up ahead.
Ofer Klein (17:14)
And it is coming for sure. When and exactly how nobody knows, but it is coming. The pace of change is increasing. It’s scary on one hand, but if you adopt it, then you’re going to be more successful than our competitors because you’re utilizing it and you’re securing it. We see, for example, big companies that a year ago, the main concept was I’m going to block AI until I figure it out. I’m going to block. And they did.
And now they say, oh, shit, I have 300 apps and I cannot block it anymore. And now it becomes 700 apps. How can I let the business use it in a more secure way?
jason (17:51)
It’s funny because I taught at Chapman University for eight years as a professor and they blocked AI from, you cannot use AI for anything, so that was last year, and now this year they’re scrambling to try to teach the kids how to use AI, and yeah, you can’t run away from it. I know we don’t have much time with you left. What’s an important trend we should be paying attention to over the next year?
Ofer Klein (18:10)
Yeah, so I think specifically in security and AI specifically, you have a trend that people are going to utilize it more and more to run faster. And then the biggest dilemma is do I let them do it and hope for the best or do I actually utilize AI as well for security? So we see more and more companies instead of hiding behind AI with the more traditional way, putting it as AI native. This is in the front,
because that’s the only way to keep up with the pace of change. And I think we’re gonna see that more and more specifically on our industry in security, that the AI native companies are gonna basically a prospect and the companies that are more legacy are just gonna be left behind.
jason (18:55)
That makes total sense. So this has been very convincing. I’m ready to go sign up. I love it. Where can our audience find you?
Ofer Klein (19:02)
So we are Reco.ai. And if you’re interested, we are happy to show you how it works. And you can basically connect with us. We’ll be very happy to talk.
jason (19:10)
And Reco.ai is R-E-C-O, R-E-C-O, a rare four letter domain name, Reco.ai. Ofer, thank you so much for being on Beyond SaaS. For our tech leadership out there, we’re committed to exploring growth. We drop episodes twice a week on Tuesdays and Thursdays. And you can find me, Jason Niedle, at tethos.com, T-E-T-H-O-S dot com. And I have a great hyperscale playbook with our battle-tested growth strategies. You can get that at tethos.com/podcast.
So I appreciate you being here for episode 50. Thank you, everyone. And until next time, this is Beyond SaaS.
