Verkada's Unethical Culture Results From Chairman Hans Robertson's Recipe

Published Apr 12, 2021 15:51 PM
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Verkada's unethical culture is a result of Verkada's Executive Chairman Han Robertson's plan, or "recipe" as he calls it. While CEO Filip Kaliszan is the public face of the company, Verkada sources consistently tell IPVM that Hans Robertson has discretely run the company from the beginning.

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Bloomberg's investigation has brought increased scrutiny into Verkada's unethical behavior and "bro" culture, as they called it.

Now, inside this report, we examine Hans Robertson's plan, how he has executed that plan and how it has resulted in ongoing sexual misconduct, hard drug use, the massive breach, secretly viewing customer video, serial false claims, and more.

Origins Story Vs Reality

Verkada emphasizes its 3 co-founders that previously worked together at CourseRank, a startup they sold in 2010 that helped college students schedule and plan courses. In Verkada's introduction, they show a picture of the three without Roberson:

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Given the 3 co-founders had no experience building IoT devices or running an enterprise sales organization, it might be confusing how they wound up building a company like Verkada.

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The answer is Hans Robertson. Verkada applies to video surveillance what Robertson did as a co-founder of Meraki (subscription-based cloud networking devices sold by a massive internal sales force). Meraki was sold to Cisco in 2012 for $1.2 billion, Robertson left Meraki in 2015 and the next year he founded / co-founded Verkada with the 3 ex-CourseRank employees.

That Robertson is applying the Meraki model to Verkada is something that Robertson readily explained, at length, in this 2019 presentation:

Ryan Young / Hans Robertson / Meraki

No individual has become more synonymous with Verkada's aggressive sales tactics than Verkada's first sales hire, Ryan Young. Hans Robertson hired Ryan Young, where Young worked under Robertson at Meraki:

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Young has set the tone from the beginning, calling his competitors 'dinosaurs', urging buyers to 'come get locked in', 'be aggressive with their sales tactics', because they are there to 'make a lot of money', etc.

Young would have even been VP of Sales, according to numerous Verkada sources, except for having a relationship with a Verkada subordinate sales employee, which caused the company to shift him to run Enterprise Sales only.

Young, from Danville, CA, started the Danville hiring focus Robertson emphasized in this presentation.

Robertson In Charge At Verkada, Numerous Sources

Sources have consistently told IPVM that Robertson is firmly in charge of Verkada with one calling Robertson "the real CEO" who "makes all the decisions":

Filip wants to do the technical stuff, but Hans is the real CEO. He makes all the decisions.

Another said "Hans basically runs everything", calling Verkada "a dictatorship" with Filip as Hans' "puppet":

Hans basically runs everything. He runs pretty much every function. None of the rest of the exec team actually runs their own org. They run their own org for show, really they're just doing what Hans is telling them. Kind of like a dictatorship from that perspective. Filip is kind of Hans' puppet, he has no idea how to run a company. He has never done that, he doesn't really know what he's doing. He does whatever he thinks Hans wants him to do. [emphasis added]

Similar issues were expressed by another source:

It's a frat boy, frat house type of mentality. That whole spiel of Hans wanting to hire athlete salespeople. That was true. There's no real structure at the top. No real explanation on why they do things. They just do things to see if it works. Managers have no experience managing people. It's very aggressive.

Another source blamed Verkada's Mass Hack squarely on Hans' focus on sales over privacy and security:

I think [Hans] thought it wasn't necessary and that the company would generate money without strict security infrastructure so why spend engineering resources on it [...] To him, the breach of customer privacy was a nuisance, nothing more [emphasis added]

The prioritization of sales was an issue in the 'RawVerkadaDawgz' incident, as a source explained:

Hans just wants to bury it. Obviously, he wishes it didn't happen but he's not gonna fire what he thinks are his best guys. I actually think he doesn't think it's a big deal. He doesn't understand why people are so mad about it.

Also, pushing employees to the office during the pandemic was advocated by Robertson with one source telling us that Robertson said "I get nervous if I don't see people in the office working" adding that Robertson "insists on seeing people working if they work from home he feels they won't get work done".

'Recipe' Of Robertson - "Sales Athletes", "Lots of Money", "Really Fun"

The "Bro culture', heavy drinking, illicit drug use, sexual misconduct, etc. is not surprising when one listens to Robertson describe his own 'recipe' for building a sales organization, featuring 'hiring half the football team' that he learned while working at EMC, as he explains below:

The emphasis, per Roberston, is to 'make a lot of money' and 'make the culture really fun for sales":

This starts with the recruiting process where Robertson literally compares it to 'fraternity rush', 'bringing your best guys' with an open bar and use that for interviewing candidates:

Verkada has had numerous Happy Hour recruiting events including one later this month in Tucson and this March Madness one last year at the start of the pandemic.

Robertson's money-maximizing approach is consistent with his tactics towards locking in customers so that they don't need to be 'worried about engagement' like other SaaS businesses:

Indeed, Robertson smugly told a Silicon Valley audience that with Meraki and Verkada, customers are effectively trapped, because "you like literally bolted the hardware to your ceiling so like you're not taking it down":

From the Plan, From the Top, Not An Accident

While Verkada is now attempting to do damage control, this shows that their unethical behavior is the outcome of Verkada's plan from the top of the company.

For example, Verkada offered Bloomberg the rationale that:

our internal policies did not initially keep pace with our rapid growth

Verkada optimized for rapid revenue growth at the expense of ethics. While these issues have continued, they were obvious even back in 2019, as Bloomberg explains in this hard to believe, except that it is Verkada, story:

A sales team scavenger hunt in 2019 included drunken employees filing into a Casper store in San Francisco, where they bounced on the mattresses, wrestled with each other and posed for pictures. The store manager called Verkada's customer service line to complain, saying their employer was obvious due to the group's logo-emblazoned T-shirts. A Casper spokeswoman confirmed the incident but provided no further details.

Another new claim from a Verkada Partner's CTO is that Verkada has fired those responsible, saying:

statements have been made that those promoting that culture have been terminated for a while now.

On the contrary, as Robertson's and Young's own statements show, the culture is being promoted from the top that is still firmly in command.

Challenges In Changing The Culture

Certainly, Verkada has and will continue to address some of the outcomes of this culture. The challenge they have is that a culture created from hiring 'half the football team' and making the "culture really fun for salespeople" inherently struggles with containing drug use, binge drinking, disparaging, demeaning, and discriminating.

The same culture that has brought these terrible things has also brought the 'rocketship' revenue growth the company is so proud of. Verkada is challenged to remove one without the other.

This culture is no accident, it is the outcome of Hans Robertson's 'recipe'.

Comments (23)
UI
Undisclosed Integrator #1
Apr 12, 2021

Apologies in advance John, I just couldn't resist!

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JH
John Honovich
Apr 12, 2021
IPVM

That's funny.

For background, Chen Zongnian is Hikvision's Chairman, Communist Party Secretary, and member of PRC National government. Chen has been relatively low-key in the last year though we do continue to track his activity.

And we do have a new Hikvision investigation in the works that will be notable.

Btw, one striking similarity between the 2 companies is they are the most revenue-obsessed companies I have ever tracked. They may be different in many ways but their shared blind obsession with increasing the top line creates long-term issues.

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Sergio Guzman
Apr 15, 2021
Pine Crest School • IPVMU Certified

You got to love people who pretend ethics has nothing to do with security. Thanks IPVM for keeping it human and real.

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UI
Undisclosed Integrator #2
Apr 13, 2021

"Love it. Go all out Hans. Go big or go home. Let the other jealous fools cower in the corners, hiding in the shadows. Do your thing. Keep Making your visions reality. Step on anyone that gets in the way. Let them talk about it. Let them wish they had the *all's to do what needs to be done to achieve the success. Let the haters hate. But don't give up; never give up." - may be thoughts floating around in the heads of some.

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John Honovich
Apr 13, 2021
IPVM

Not sure if you are kidding or not but 2 Silicon Valley expressions apply here - "move fast and break things" and "ask forgiveness, not permission". They leave a lot of broken things in the wake of 'success'.

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UM
Undisclosed Manufacturer #3
Apr 13, 2021

Don't they say that the apple doesn't fall too far from the tree? I know that's generally about parents and children - but I feel like it applies here as well. People generally follow their leaders, or leave the organization.

It's almost as if by staying at the company, employees implicitly condone this behavior.

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JH
John Honovich
Apr 13, 2021
IPVM

While it's hard to assess why every employee stays, one interesting thing is to look at the characteristics of the employees a company hires.

For example, of the 577 Verkada employees listed on LinkedIn, 82 of them list fraternity, baseball, or football on their LinkedIn profile:

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By contrast, of the 1,436 Genetec employees listed on LinkedIn, only 16 list fraternity, baseball, or football on their LinkedIn profile:

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Verkada employees are ~14x more likely to list those affiliations (frats, football, and baseball) than Genetec employees (82/577 vs 16/1,436). This is a reflection of culture.

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GW
Gary Woitzik
Apr 13, 2021

fraternity, baseball, or football

so what's your point? Are people who join fraternities, or play baseball, or football evil people?

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John Honovich
Apr 13, 2021
IPVM

Are people who join fraternities, or play baseball, or football evil people?

Gary, thanks for your first comment. Serious criticism of fraternities is widespread and long-standing so while 'evil' may not be a fair description, the ethics of fraternity life are seriously questionable.

Moreover, these people were not simply in fraternities, they find it important enough to list in their LinkedIn profiles.

Lastly, a lot of the criticism of Verkada, from VICE to the Verge to Bloomberg has been about the frat / joke culture, LinkedIn results show there is a factual basis in such concerns.

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Gary Woitzik
Apr 13, 2021

Thanks for your resource pertaining to fraternities.

What about people who were on a baseball or football team? If I follow your logic correctly, an organization who has too many employees who were previously athletes will cause some sort of culture/trust issue for a company?

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John Honovich
Apr 13, 2021
IPVM

Gary, as for football or baseball, the question is how relevant those are to the job at hand.

If I want to hire a sports performance trainer, e.g., I may look for a CSCS or someone who has been a coach or played at the college or pro level. So someone who played D1 football, has a Masters's in exercise science, etc. might be a great fit.

However, for someone who is selling, developing, or managing enterprise security systems, I do not see having a high proportion of those listing themselves on LinkedIn with the keywords of 'football' or 'baseball' to be a strong fit.

Beyond this, looking at the LinkedIn profiles of Verkada's employees, 98%+ have no previous security background, which I think is a negative. It's good to have some people from different backgrounds, but just like one would be concerned about a football team with 98% players who never played football before, I am concerned about a security company in such a situation.

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GW
Gary Woitzik
Apr 13, 2021

This is getting very confusing... you now seem to be making a connection that people who played sports would only have a degree related to sports, or they would only be able to work in some sort of sports related field??

I also did a real quick "investigation". It seems that the vast majority of employees at Genetec studied at a school located in Quebec, Canada. My belief is that Fraternities are not as common in Canada. Could this influence your findings above?

Also maybe you should add other sports to your search criteria. Maybe Genetec employees are more likely to have past experience playing Hockey or Curling. Lacrosse is Canada's national sport, maybe look into that? Or skiing??

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John Honovich
Apr 13, 2021
IPVM

Gary, can you make sure Ryan Young gets you some swag or champagne or a Yeti for you hounding me on this? :)

So I did as you suggested and ran searches for "hockey OR curling OR skiing OR lacrosse OR football OR baseball OR football OR fraternity"

Verkada 104, Genetec 32 again despite Genetec being nearly 3 times as large as Verkada.

Verkada 104:

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Genetec:

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Lacrosse may be Canada's national summer sport but Verkada dominates Genetec in lacrosse, 14 to 2.

Verkada:

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Genetec:

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Does that help? What other analysis would you like me to do?

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GW
Gary Woitzik
Apr 14, 2021

I was not doing anything this to get any swag, champagne or a YETI, and frankly I am offended that you would make that assumption. Ironic that you would consider questioning some of your editorial narrative as "hounding".

I have recently started to rethink further on what IPVM reports. I purchased an IPVM membership to increase my knowledge in the Security Industry. I was initially under the impression that the information you share/create would be valuable. Posts like this makes me question my decision, and the value of my membership.

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John Honovich
Apr 14, 2021
IPVM

Gary, you throw out a bunch of hypotheticals in an attempt to disprove my analysis, I answered all of your hypotheticals with further analysis that proved my original analysis was correct, do you have anything to say about that?

I was not doing anything this to get any swag, champagne or a YETI, and frankly I am offended that you would make that assumption.

And I was not claiming you were doing it to get anything from Verkada, I was saying they should give it to you:

Gary, can you make sure Ryan Young gets you some swag or champagne or a Yeti for you hounding me on this? :)

Again, you asked:

Also maybe you should add other sports to your search criteria. Maybe Genetec employees are more likely to have past experience playing Hockey or Curling. Lacrosse is Canada's national sport, maybe look into that? Or skiing??

And I delivered. Verkada is still way more likely to list any and all of them than Genetec.

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GW
Gary Woitzik
Apr 14, 2021

This is getting very confusing... you now seem to be making a connection that people who played sports would only have a degree related to sports, or they would only be able to work in some sort of sports related field??

I am not sure what you actually proved with you analysis. You did not answer this question I asked you.

In my opinion, I believe that people who have played sports make great employees, for companies in any industry. There are many valuable life lessons learned from being on sports that translate to careers, including accountability, dedication, leadership, problem solving skills, etc.

I do not agree on how you are continually trying to spin this as a bad thing.

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Clint Hays
Apr 14, 2021

My take is more so the value placed in listing there associations on your LI profiles. LI is typically personal highlighting and fluff pieces so if those are the things you list then you have a higher value of it than someone else who chooses not to list but was involved.

Would you value someone listing Toastmasters or Grand Mason's more than someone listing their frat on their LI?

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JH
John Honovich
Apr 14, 2021
IPVM

In my opinion, I believe that people who have played sports make great employees, for companies in any industry.

These are different things:

- Does Company A (Verkada) have more athletes than Company B (Genetec)?

- Does having more athletes make for a better physical security company?

The first one is a matter of fact and the LinkedIn analysis (even after you asked me to redo it) returns that Verkada has way more former Athletes and fraternity brothers than Genetec.

The second one, I agree with you, is a matter of opinion.

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Kevin Lloyd
Apr 21, 2021
Modern Systems Inc. • IPVMU Certified

The observation that Verkada's employees are 14 times more likely to mention sports/fraternities in their LinkedIn is an interesting note that was presented carefully.

You took an interesting sidebar and are threatening to cancel your membership over it. Relax

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Shannon Davis
Apr 13, 2021
IPVMU Certified

Seriously.. He is the big cheese and he talks "like" a tween, teen, Kardashian or whatever! How many times does he say "like". Grow up and talk intelligently and professionally.

Like you know like the boss like mannnn like I just love saying like, I know right!

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Brad Canham
Aug 25, 2021

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The Vision Stack

Offered above is, I hope, a forward looking spin on the discussion regarding Verkada's culture, and any organizational culture. It is derived from my consulting and doctoral research into leadership with technology firms - who often are part of "IT stack" but don't have an "human stack" beyond an organizational chart. The Vision Stack is my term for how leaders and organizations "stack" expertise of various types to achieve their vision of excellence (arete).

The Greek terminology for these types of knowledge is likely unfamiliar. However, detailed below are how these "ways of thinking" working together in a Vision Stack to inform "how this place actually works" (culture) and for leaders employ to build and understand a culture which are, I trust, quite familiar.

Episteme - abstract concepts, like science, mathematics, and physics, often forming the foundational basis of a company's technology (patents, algorithms, etc...) (Foucault)

Techne- "craft knowledge" including building the product, business models, departmental expertise (sales, finance, marketing, operations etc...) (Roochnik, Plato)

Metis- "cunning intelligence" pragmatic and action-based (not ethics), instinctual, ever-changing (offering a "deal" at the right moment to cut off a competitor and close on a customer) (Detienne & Vernant, Chia, James C. Scott)

Phronesis- "practical wisdom" pragmatic and ethics-based (not action), reflective, cultural values answering practical questions "Who wins, who loses?" "Who has power?" "What is this all for?" (ex. Do we reduce the sales teams deal % to keep shareholders on board for next funding round?) (Flyvbjerg)

Arete- Excellence, a "full" and contextual human version and vision of personal and organizational striving. The paradoxical and fundamental nature of arete is that it is never "achievable" - Arete only exists within organizations and individuals who continually reach for it. (Pirsig, Roochnik)

In the context of Verkada, the crafted sales method is teachable (techne). The ethically fraught, ever-changing, and opportunistic sales orientation (metis) is effective.

The lack of an ethical foundation (phronesis) to balance metis eventually erodes organizations and results in the ouster of leaders (ex. Uber) - because organizations cannot achieve a solid excellence (arete) without it.

As described, Verkada's approach is a typical model for short-term oriented, money driven and ambitious tech firms and founders caught up in a (epiteme>techne>metis) model but unwilling, or unable, to pursue a full "human" and long-term Vision Stack of excellence:

episteme>techne>(phronesis+metis)> arete∞

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Undisclosed #4
Aug 25, 2021
IPVMU Certified

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Brad Canham
Aug 25, 2021

Vision Whack? LOL. Well done.