The bitter TAM lesson:
Never value a disruptive technology by the current market size
Good lore:
In 2018, Christina estimated the entire SOC2 compliance market at just $100M.
Vanta alone now does far more revenue than that. They made compliance easy, so customers started demanding it.
Some early investors didn’t buy the TAM either- They bet on Christina, thinking she’d pivot into something bigger.
Instead, by the Series A, Vanta was doing ~$10M ARR (w/ only $3M seed) and raised $50M at $500M from Sequoia.
Also, a score for VCs-turned-founders: Christina worked at USV.
Congrats @TrustVanta & @christinacaci!
Actually not really “disruptive” in the truest sense
The major force seems to be that SOC-2 has an interesting kind of a network effect: once you get SOC-2 you need to buy from vendors that also have SOC-2.
The impact of making it 10x easier to attain was huge
Normally a network effect is defined as “using a thing is more valuable as more people use it”
Here it’s more like “NOT using a thing is more costly as more people use it”
SOC-2 used to be obscure and only needed if you wanna sell to huge enterprises, but it’s becoming the “driver’s license” of running a tech business
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