An MIT MBA Attracts $73.9 Million in Funding

Freddy Kerrest co-founded Okta with a former Salesforce colleague

Freddy Kerrest co-founded Okta with a former Salesforce colleague

Freddy Kerrest, 36, follows a simple mantra for entrepreneurial success: Love what you do, know it well, and don’t do it alone. This simple approach enabled Kerrest to find his niche and turn it into multi-million dollar startup Okta, the first cloud-based identity management system.

Kerrest always knew he wanted to launch a software-focused venture. He had 15 years of industry experience and found validation in helping businesses discover software-based solutions to key problems. In fact, Kerrest advises aspiring MBA entrepreneurs to solve a problem they are passionate about. “If you’re doing what you love, then it will get you through a lot of the tougher times,” he says.PoetsQuants-300x250-MagazineAd2

Fortunately, Kerrest found what he loved to do as an undergraduate studying computer science at Stanford. But he didn’t land on the idea for Okta until nearly a decade later–after putting his business development career at Salesforce.com on hold to pursue an MBA at MIT’s Sloan of Management. During Kerrest’s second year at MIT, he reconnected with Todd McKinnon, a former Salesforce.com colleague. The two discussed the problems people had with managing usernames and passwords on their home computers. But Kerrest and McKinnon soon concluded that the problem was much larger than that. Enterprises trying to manage access for hundreds of people across multiple applications needed a seamless solution. Kerrest saw a big market with potential for scalability and growth. The two decided to start an enterprise software company built around a cloud-based identity management platform. It would allow businesses to securely manage access to all of their on-demand applications within a single space. The idea evolved into Okta.

The process wasn’t all forward motion. Kerrest and McKinnon went through a “courting” process to make sure they were a good co-founder fit. After weeks of working on a business plan, a financial model, and talking to potential customers together, Kerrest knew he had found the right partner. They started building out their business.

Kerrest graduated from MIT on a Saturday in 2009. The following Monday, he and McKinnon were working full-time in Okta’s first office in San Francisco. Four years later, Okta has raised a whopping $79.3 million and signed up big name customers such as Eventbrite, Groupon, LinkedIn, and HubSpot. Kerrest doesn’t see his company slowing down anytime soon. “We’re still obviously very bullish on our prospects,” he says. “I joke with the dean at MIT Sloan and the guy who runs the entrepreneur center that when we do go public and we get that picture of us ringing the bell, I’ll make sure they get autographed copies,” he laughs.

Kerrest says that it’s these types of friendships with faculty and alumni that made his experience at MIT Sloan so valuable. Today he still trades strategies with former classmates and even exchanges holiday cards with several of his professors. Kerrest believes that joining the MIT Sloan ecosystem was one of the best decisions he ever made in his academic career.

“Going to MIT was a fantastic experience, and I have nothing but great things to say,” Kerrest says. “I feel more allegiance to MIT for the two years I spent in business school than I do to Stanford for my four years of undergrad, because I professionally developed a lot more when I went to business school. This is a really good program because it’s focused on practicals like nuts and bolts. Reading business cases is one thing, but MIT helped me understand how to pick a market, find a co-founder, and navigate law in entrepreneurship. If I had to do it all over again, I would certainly do the exact same thing.”

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