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Companies often hesitate to adapt to new technology, especially when it means changing how they serve customers. But 1Password made a bold shift from focusing on consumers to offering enterprise-level security solutions.
Founded in 2006, 1Password launched a password manager that quickly gained a reputation for keeping sensitive user data safe. They let users securely store software licenses and other vital information in a virtual vault, protected by a robust password system designed to thwart brute-force attacks.
David Faugno, once enjoying a semi-retirement as a board member for various companies, found himself drawn to 1Password’s collaborative culture. He joined as president and COO in September 2023 and quickly stepped into the role of co-CEO.
Before 1Password, Faugno spent over a decade at Barracuda Networks as CFO, where he gained valuable insight into security challenges facing businesses.
When he joined 1Password, the world was just coming out of the Covid-19 pandemic, which transformed workplace dynamics. Remote work became the norm, changing how companies operated and expanding their security boundaries into employees’ homes.
As Faugno pointed out, “The world was fundamentally changing. The tools businesses provided to keep employees secure had to evolve.” With the rise of remote work, old security perimeters, once confined to corporate networks, now extended into homes.
Most cybersecurity breaches stem from compromised credentials—think stolen or reused passwords. If employees use weak systems at home, they can unintentionally put their companies at risk. That means protecting home devices is just as crucial as safeguarding corporate networks. Offering employees free family licenses for security packages can help bridge that gap.
Balancing strong security with usability can be tricky. Faugno recognized that while tight security measures might complicate setups and recoveries, 1Password decided early on to make security user-friendly. This approach led to rapid adoption, with the password manager finding its way into thousands of businesses.
Faugno realized that as 1Password transitioned, it became more popular in enterprise settings. “When teams gained access to resources outside central controls, security-minded folks thought, ‘I can use 1Password for this,’” he explained.
When he first joined, Faugno’s priority was to bring in a finance leader. With a sales team in place to communicate directly with enterprise clients, 1Password could better understand their needs, leading to the development of tailored solutions.
“When we invested in 1Password back in 2019, it had zero salespeople or accountants—just developers making a quality product,” he noted. By engaging with enterprise clients, they began sharing how their platform fits into larger security frameworks.
1Password started building the necessary infrastructure for enterprise support, billing, and implementation, which enabled deeper connections with businesses.
Adapting to market changes always carries risk and expense. Over four years, 1Password established a strong foundation for growth, remaining profitable despite initially lacking a sales force. This stability allowed them to invest wisely without sacrificing profitability.
While maintaining growth is essential to staying afloat, it can be tough. Many companies spend heavily on promoting products that spike in popularity but fail to sustain that momentum. 1Password managed to invest in itself while staying profitable across sectors, ensuring steady growth.
“Over 75% of our sales are to companies, yet many still see us as a consumer-focused business,” Faugno pointed out, reflecting on the company’s evolution.
The cybersecurity landscape is always shifting. What’s cutting-edge today may become outdated in six months. Staying ahead means constant updates to counter new threats.
Looking ahead, one major concern is how to protect communications in a post-quantum world. Quantum computers can process data far faster than traditional ones, threatening existing encryption methods.
While numerous quantum-resistant technologies are under development, testing is ongoing. Instead of focusing on one technology, 1Password has teams dedicated to tackling these upcoming challenges. They view the future of security as a multifaceted strategy—utilizing multi-factor authentication, passkeys, and broader authentication techniques across networks.
Faugno said, “We have teams thinking two steps ahead. The world is changing rapidly, and quantum computing is a part of that.” Transitioning to a passwordless future is a long journey, and today’s strong passwords and encrypted vaults are just the starting point.
Building a solid reputation is critical in security. Tools that prove effective against real attacks can gain traction in the business world, drawing interest from organizations.
“If you gain trust at the individual level, it translates to businesses,” Faugno concluded. “Creating a tool that users feel keeps them secure and productive is key.”