CrowdStrike Fal.Con 2024 | Spencer Thompson | Prelude

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Spencer Thompson

CEO & Co-Founder

Prelude

Prelude elevates cyber defense with AI-driven, actionable and automated threat intelligence

Since it’s not a matter of if, but when a cyber attack will strike in today’s expanding digital landscape, threat intelligence is needed for enhanced incident response and proactive defense by reducing the attack surface.By transforming threat intelligence into validated protections through artificial intelligence, Prelude Research Inc. goes a notch higher by automatically generating missing detection and prevention capabilities through one-of-a-kind integrations with top defensive controls, such as CrowdStrike Inc., according to Spencer Thompson (pictured), co-founder and chief executive officer of Prelude

play_circle_outline Company's pivot from ed tech to offensive cybersecurity due to COVID.

play_circle_outline Company uses AI to make threat intelligence actionable and reduce friction for customers.

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Spencer Thompson | Prelude

ST

Spencer Thompson

CEO & Co-Founder Prelude

Spencer Thompson, CEO and co-founder of Prelude, explains how their company helps validate cybersecurity controls and run advanced simulations of cyber attacks against infrastructure to ensure protection. Through AI automation, Prelude aims to make threat intelligence actionable in minutes, reducing friction and improving efficiency. Thompson shares insights on the challenges of evaluating and implementing multiple cybersecurity tools and the importance of focusing on autonomous config management. Looking ahead, Prelude's goal is to automate the process of de... Read more

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Rebecca Knight

>> Good afternoon everyone, and welcome back to day two of theCUBE's Live coverage of Fal.Con 2024 here at the ARIA. I'm your host, Rebecca Knight, sitting alongside my co-host, co-analyst, Dave Vellante.

Dave Vellante

>> Hello.

Rebecca Knight

>> It is still buzzing in here. It's really incredible to think that-

Dave Vellante

>> Yeah, picked up this afternoon....

Rebecca Knight

>> this is after lunch. And yeah, this is pretty incredible.

Dave Vellante

>> Have you been over to the other side yet?

Rebecca Knight

>> No, not yet.

Dave Vellante

>> Go check it out.

Rebecca Knight

>> Okay.

Dave Vellante

>> That's where we were last year. We were stationed the other side. It's exploding there.

Rebecca Knight

>> I've been here at this hub.

Dave Vellante

>> We are fire marshal full.

Rebecca Knight

>> We are. We are indeed. And I want to introduce our next guest. He is Spencer Thompson, CEO and co-founder of Prelude. Thank you so much for coming on theCUBE.

>> Thank you for having me. I appreciate it.

Rebecca Knight

>> So tell our viewers, Prelude, it's four years ago you founded this company-

>> Roughly.

Rebecca Knight

>> Roughly. Tell our viewers a little bit about what you do.

>> Very simple. So most often a board, when a famous or newsworthy article comes out about a public cyber attack, the Wall Street Journal, Bloomberg will write an article about how scary it is. A very well-meaning board will take that article, they send it to the CEO, and they write, "What the heck?" to the CEO. That CEO very often passes it to a wonderful CISO who says, "What the heck?" Who then asks their teams. They're all asking effectively the exact same question. Are we protected against that attack happening from us? It's all we do is answer that question. We do it in two ways. One is we validate your controls are working, making sure if you pay for wonderful tools like CrowdStrike, you're getting the most out of it. And the second is we run advanced simulations up that attack against your infrastructure. So we literally mimic the behaviors and signatures of that attack. We can tell you with 100% certainty that you're actually going to be protected against an attack or not.

Dave Vellante

>> So you're like a friendly hacker.

>> A very friendly hacker.

Dave Vellante

>> Yeah.

>> Super friendly.

Dave Vellante

>> So back a step, why did you start the company? And how did you start the company?

>> Very kind of meandering strange story. Sure you looked at my background a little bit, but I started an ed tech company a long time ago.

Rebecca Knight

>> Well, first you dropped out of college.

>> First I dropped out of college, which is a whole other story too, which I'm happy to talk about. Started an ed tech company. Actually started at school. It's funny, I just gave a talk in one of the other rooms and one of the people in the audience was one of my students at the school.

Rebecca Knight

>> Wow.

>> That was called The Prelude Institute. That school literally helped people become tier one SOC analysts from scratch. They had to have no background in IT, no background in cyber. And so that was the first incarnation of Prelude. COVID killed that business. We literally had in-person classrooms in New Hampshire and Seattle, killed the business. Completely pivoted towards offensive cyber security. So that was why it's roughly 2022 that we started this business. But it's been a very kind of organic process.

Dave Vellante

>> You couldn't have run that business remotely? Just you had to be kind of-

>> We believe very deeply in being in-person to help people.

Dave Vellante

>> Belly to belly.

>> Yeah. We made the decision to not do that anymore and instead pivot incredibly hard into offensive security. Raised a lot of money, and here we are.

Dave Vellante

>> So do you do pen tests? Is that part of it? Do you partner for that? Do you have tooling to do that?

>> If you think about a pen test, it's typically outside in. You're looking at a web application, you're looking at a very important thing. You're running a single kind of attack against that. We literally say, if you take Fuzzy Bear or any of the things that CrowdStrike's talking about, how do you actually know when that threat intelligence comes out, whether you can actually stop that or not? It turns out that threat intelligence is usually 20, 25 steps. It's highly complex, takes a long time to build tests against that. We will literally go and build those tests in minutes. We can talk about that in a second around AI. But we actually go and every part of the attack chain to run it against your infrastructure. So I would say it's much more robust and complete than typical pen test, but also much more complicated.

Rebecca Knight

>> How did you build your team? Because as Dave said, you're a very friendly hacker, but you need to hire people who have that kind of mindset who can think like an infiltrator, think like an adversary. So how did you find the people and what skill sets were you looking for?

>> We have a really interesting group of people on the team. So I'll give you one example. We have a guy named Matt Hand who works for the company. He wrote a pretty well-known book called Evading EDR, and that book literally dissects how EDR actually works. It's not really about evading it, it's how it actually deconstructs and works. He's a red teamer at a bunch of very kind of famous companies. Why does he work here? Because he understands what it takes to actually protect organizations against these kinds of common malware and behavior. Okay, that's one example. We have executives from Wiz, we have executives from Tanium, we have executives from a bunch of different organizations that all come together. It's actually not just a hacker mindset. Hacker mindset's kind of on the research side. We have a lot of the commercial mindset side that all kind of fuse together. Some former CrowdStrike employees as well. It's kind of a mix of everything.

Dave Vellante

>> How did you fund the company? Tell us that story.

>> Fund the company?

Dave Vellante

>> Fund it. Yeah.

>> So when we did the pivot back in 2022, we decided to focus very squarely on open source projects. That caught the attention of some early pre-stage investors. And then our series A was largely Sequoia, Insight. CrowdStrike's an investor in the business with the Fal.Con fund. Mitre's an investor out of that kind of corporate parent. So we brought a whole bunch of people together for the round.

Dave Vellante

>> And when did you do that raise?

>> April, 2022.

Dave Vellante

>> Okay, so that was not the greatest time to do a raise, right? Because the market was changing-

>> It was in between time.

Dave Vellante

>> So what was that ... Right. You were in the .

>> It was like Zurp-ish basically. Yeah.

Dave Vellante

>> Yeah, but it was ... Yeah. Okay. But it was post-Ukraine-

>> It was....

Dave Vellante

>> and so sentiment had started to turn.

>> Yep.

Dave Vellante

>> Was it a difficult time to raise or did your background enable you to-

>> I think we're very lucky, to be honest. We can take some credit towards having an ambitious vision, but I think we caught the tail end of kind of macro tailwinds into cyber being an investable category. I think Zurp still had some kind of remnant effects. But we have some of the world's best investors in the company. And so I think they're also very discerning about what is good and what is bad. And so one of my adages is great quality companies endure through whatever market, doesn't really matter. If you provide value to customers, they vote.

Dave Vellante

>> And it's an as-a-service model, an ARR?

>> Correct. Yeah.

Dave Vellante

>> And do you have product market fit at this point?

>> That's a great question. The reason I shrug my shoulders is because we live in a world that changes so frequently. I could have given you that answer definitively six months ago and been like, "Absolutely we do." If we do not keep up, we will not have it in six more months. So I would say we are on our way right now. We have a bunch of really kind of talented and I would say very deep customers that we work with. We spend a lot of time with the CrowdStrike folks on partnering through both the marketplace, but also with a bunch of their customers.

Dave Vellante

>> So you've really only been through one, maybe two renewal cycles.

>> I was going to say, we are actually approaching our first renewal cycle right now. We only went in GA last June, July last year.

Dave Vellante

>> Okay. So what are the signals that you as a CEO look at to determine ... I mean, I think product market fit is all about adoption. And if you can get people to renew, that's the best sign. Andreessen says, "Oh, when your servers are blowing up." Okay, I guess. But what are the signals that you look at, Spencer, to gauge whether people will renew?

>> For me it's actually a little ... I agree with that point totally. It's a little bit different. It is the human element. There's usually a person that relies on that product to do their job. If they cannot do their job without your product, you have product market fit. There is this almost weird energy that you feel when somebody actually uses the product, when they actually adopt the product, when they tell other people about it. There's a lot of in-between versions of that. Building world-class product's actually super, super hard. But if you go to the practitioner on the floor right now and you ask about CrowdStrike, they love CrowdStrike, right? It's the practitioner. Yes, the CISOs love it. They watch Formula One, they see Mercedes, whatever else. But the practitioners have to be obsessed with it too.

Dave Vellante

>> And they've consistently said best product.

Rebecca Knight

>> They have. And I think that that is such an excellent point, is that you need the people, the front line people who are doing the job to evangelize and then tell their boss, "Hey, yeah, I need this."

>> Yes. I think typically a lot of cybersecurity was bought by CISOs top down and they said, "Hey, use our stuff."

Rebecca Knight

>> Right.

>> And they would say, "Well, that's not my favorite product." And so bottom up I think is also important.

Dave Vellante

>> So if your product market fit is ... I mean, it is for any company. But it sounds especially for you. It's ever-changing because of the nature of cyber. How as a CEO do you decide when to scale go to market?

>> That's a great question. I'm a big believer in this concept of the inevitable arrow of progress, which sounds like a weird stupid thing to say.

Dave Vellante

>> Explain.

>> Yeah. So basically part of my job is synthesis of macro, just like an investor. Ultimately CEOs are capital allocators. My job is to invest dollars into things that return something at some point. People usually don't think about it in that way, but it's the same job. So the inevitable arrow of progress is if you look two, three, four years out, what is inevitable in the world? What is going to happen? Jeff Bezos has a very famous quote around this, which is he says, "In the future, will customers want books to be more expensive or less expensive? Will they want those books faster or slower?" Well, they want them faster and they want them cheaper? So we invest every dollar into those things. That's it. So for us, we go, "Is AI going to affect cyber, for example, and make attacks more rapid or less rapid?" Well, more rapid. Do people want more autonomy and more kind of autonomous work or they want more manual work? Autonomous work, great. Let's invest very deeply in those things that don't change, the fundamentals that don't change in a couple of years.

Dave Vellante

>> Yeah, great. Thank you for that. That's a great answer.

Rebecca Knight

>> As an entrepreneur, and Prelude, as you said, this is not your first rodeo as a founder, I'm curious where you fall on the debate of higher education right now, because there really are real questions that people are grappling with, particularly as the cost of college has skyrocketed for so many people. And wondering whether or not the degree is actually worth it. You're someone who's already had some success without a college degree, but not everyone can be like you either. So where do you fall? What are your thoughts on this?

>> I think it's incredibly complicated. It's such a bad way to start an answer, but I think that's the only answer. So I spent nine years building a company in education technology. So I've had various views of this. I think really world-class programs endure. Some of them are cheap, by the way. Some of them are very expensive. They endure the test of time. I think the vast preponderance of higher education costs a lot of money and it's maybe not the best fit for a lot of people.

Rebecca Knight

>> Okay, fair enough. Fair enough.

Dave Vellante

>> Yeah, the ROI, as one with four children, you have a question .

Rebecca Knight

>> You get a lot of those tuition bills.

Dave Vellante

>> And I have kids who went to private schools and public schools, state schools, and I would say that the delta and the spectrum between a small liberal arts school in upstate New York, a school like Ole Miss in the Deep South and everything in between is pretty narrow band. And I think a lot of it is the experience and the fit and the culture. But just at the end of the day, if you've got the brains and the you-know-what, go for it.

>> I think an interesting point on that is culture endures through any product. Like higher education's a product, buying cybersecurity's a product. There are world-class organizations where you feel it in every single thing that they do. You feel it in the leadership, you feel it in the website, you feel it in the brand. So like Babson College for example, they do an incredible job. Are they in the top 10 list of any elite whatever? Usually not.

Rebecca Knight

>> They are. Did you know the Wall Street Journal number two.

>> I saw that actually.

Dave Vellante

>> John Furrier is a Babson alumnus.

Rebecca Knight

>> Oh, is he?

>> Those are great. Like Northeastern, Babson-

Rebecca Knight

>> Yeah. No, they're coming. They're up and coming.

>> But that's because they have incredible leadership.

Rebecca Knight

>> Yes.

>> You cannot replace incredible leadership. So my whole thing is I don't care if it's a school, I don't care if it's a cyber company, you pick things that have definitive cultures. They're the best in the world. They obsess over excellence, they obsess over customers, and that's it.

Rebecca Knight

>> So as a young leader, where do you go to for advice and for mentorship and for ideas? Because you are doing the work of your company, but you're also leading a team.

>> Yes. I think I am incredibly fortunate to be ... I mean, one of our investors is Sequoia Capital. So I am the least successful person by far of any of the founders at Sequoia Capital.

Rebecca Knight

>> It keeps you humble. It keeps you humble, Spencer.

>> Oh, thank you. I think humility, by the way, builds curiosity. The actual answer to your question is you have to believe in your gut that you have things to learn. Not everybody actually believes that. There's a lot of people that go, "Actually, I went to school and I've sold a company and so therefore I'm good to go." That's not true. And so I am surrounded by literally world-class entrepreneurs all the time. So I'm very fortunate. I have a bunch of friends that have sold companies that are very successful. I call and lean on them all the time. My family's a huge part of that too. But for me, I try and surround myself with excellence to remind myself there's a long way to go, which there is.

Rebecca Knight

>> Excellent. Indeed. Indeed. So talk about the kinds of conversations that you're having here at Fal.Con and customers you're interacting with and ideas that you're going to take with you back to Vancouver.

>> One very enduring theme for us is actually making threat intelligence actionable. If you go all the way back to the beginning of CrowdStrike, like the first two and a half years, they actually were not selling next-gen AV or EDR at the time. It was literally just threat intelligence. These very long, complex, amazing documents that are 30, 40 pages come out and they say, "Ah, this spooky thing is happening. You should really pay attention to that inside of your company." And what we've gotten a lot of at this conference is how do we do that? So we spend a lot of our time applying AI to that. I'm sure you haven't heard of AI at all in this conference. But we spend a lot of time basically automating almost all of that work. And so for us, people come to us and they say, "Can we please make that process that takes a month or a week take five minutes? How do we do that?" It's been a big theme for us. Actually just reducing friction in general. I think people are sick and tired of the 100 tools that they have to tune and tweak and maintain and this and that, and they just want us to reduce friction over and over again.

Dave Vellante

>> Do you see that tools creep changing? Because the data suggests that the consolidators are kind of losing, that entropy is winning.

>> I read that too. Which is like when you take the survey of most CISOs and say you're going to buy more tools, they actually say more tools still. And we're at like ninety-ish tools per ... I don't know is the short answer. What I do know is that, again, going back to the teams, they get very frustrated that they have ... Imagine the number of POCs you have to run to buy 90 tools, 400, 350 POCs. They're spending a lot-

Dave Vellante

>> At least.

>> What we hear a lot of is, "We spend a lot of our time evaluating tools and not actually implementing tools." Which is why I started the first part of the talk on what do we do? The whole first half is basically autonomous config management. How do you actually make sure ... CrowdStrike has 51 different policies, roughly, inside of their tool. I don't know what most organizations ... If you have a hundred thousand endpoints, are you sure that they're working properly on all those endpoints? It's a really hard question to actually answer. We spend a lot of time on figuring that part out for customers. That takes five minutes. And then once that's ready, then they say, "Let's actually go and run simulations against that stuff."

Dave Vellante

>> My last question, fast forward to, what is it, September, September 2025. What do you want to be able to say, Spencer, 12 months from now that you can't say today?

>> I would love to be able to say that we can take any threat that has happened in the past or potentially will happen in the future, and automate every single step of telling you if you're protected against that in under a minute.

Rebecca Knight

>> Under a minute.

>> Under a minute.

Rebecca Knight

>> Whoa.

>> That is our goal.

Rebecca Knight

>> That's ambitious. I love it.

>> I agree.

Rebecca Knight

>> I love it. Bold, audacious goals.

Dave Vellante

>> Good luck with that.

Rebecca Knight

>> Exactly.

>> Thanks. Exactly. Good luck.

Dave Vellante

>> No, I'm pulling for you.

>> Thank you.

Rebecca Knight

>> Yeah, no, very cool. Spencer Thompson, thank you so much for coming on theCUBE.

>> Thank you .

Rebecca Knight

>> A pleasure having you on.

>> Thank you.

Rebecca Knight

>> I'm Rebecca Knight for Dave Vellante. Stay tuned for more of our live coverage of Fal.Con 2024. You're watching theCUBE, the leader in enterprise tech news and analysis.