1Password is raising $200M of VC

Michael Tsai has a roundup of comments and @gruber at Daring Fireball has this to say:

" Good roundup of links and commentary by the inimitable Michael Tsai. The 1Password founders seem confident that they can expand rapidly into the enterprise world without losing the soul that has made their indie consumer app so beloved (and trusted). Most companies that have tried this, however, have failed. (Dropbox is the one that pops to mind first.)"

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The Michael Tsai roundup up is interesting in that it points out that 1P competitors have already snapped up similar VC money for pivots to the Enterprise market and starting to outflank them. Combine that with the company already experiencing growing pains while doubling every year (with massively growing Customer Support/GDPR needs) it makes sense to get a funding injection as long as it’s with the right VC with the right type of experience. Time will tell of course. In the mean time, consumers won’t see much difference for a while, and if something untoward happens to the company as it grows (a la Dropbox’s business-oriented revamp and limiting free accounts) plenty of free-to-cheap options abound.

With experience with vulture capitalists killing off great ideas and decent companies this is disturbing at best and a deal breaker at worst. I will be looking into open source systems for password management now.

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Without seeing their books, knowing the float, who the investors are etc, you can’t say that. Sure, VC’s are aggressive, but ANY investor wants to earn a multiple on their original investment.

Pretty good piece on this here.
A bonus piece a lot of coverage missed: that $200M is not exclusively going into the company. Crunchbase reports that only a third is an investment in the company, and the rest is heading to existing shareholders, which allows delaying a liquidity event like an IPO.

https://char.gd/recharged/daily/1passwords-quandry

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I for one welcome our new 1Password overlords. I’m a consultant developer, and we use 1Password at the company I work for, but at the project I actually spend my days developing for, we use LastPass.
Just this thursday I and THREE other developers spent ten minutes trying to find a password we knew was stored somewhere in LastPass, without finding it. In the end we had to reset it!

So go ahead, Agilebits - make my life easier.

Edit: And yes, I know it was in LastPass, because someone else showed us where it was after we reset it, since we had to change it in the shared database.

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I was certainly surprised, but don’t see any reason to be concerned. Obviously we can only see so much as outsiders not part of the company, but I think the guys at AgileBits have shown that they can and do make good decisions.

Of course, the trust I have in them isn’t a given, and could change based on what happens going forward, but at the moment I see no reason to worry.

I’m not suggesting that anyone should jump ship. 1Password is a great product. The question isn’t whether it will remain a great product, but a great product for whom. This could be a change in priorities that builds great new features but doesn’t necessarily bring the individual or family user along for the ride. As we’re subscribers by and large we have an expectation for future support, but I think some of us will be paying a little more attention over the next year or so.

For a little while I’ve suspected that I could work with just iCloud Keychain. In practice I use iCloud Keychain much more than 1Password, certainly from the Safari perspective. 1Password is the source of truth but Safari auto-fill is generally the input method and that’s been a great system for a long time. It’s features like Watchtower and the credential review tools that give 1Password value for me. I’d rather not lose those.

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What is unfortunate about this thread is that I have yet to see anyone be happy for for the 1P founders and team. They have worked their tails off for 15 years, been completely honest with people, and provided a great product. So now that they want to take some money off the table and reward themselves for the risk that they took, they get flogged.

The simple truth is this: They will either continue to provide a great product or people will find an alternative that fills a gap. I am going to be happy that the 1P team and employees get a chance to take care of their families and have a chunk of capital to do something awesome.

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Dave (the founder) has posted a bit of a response/explainer to try and counter some of the negativity:

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That’s because I’m a customer, not a friend.

Edit: Having said that, I’m not worried about this at all. 1Password has been great for 15 years, and I’ve paid them tons of money. If they were to fold, pivot or just fuck up, I would stop paying them money. Hopefully there would then be a little period were I used a worse product, and then someone would pop up with a “killer” that would make me excited again.
If not… meh… I could live with a slightly worse password manager

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I think “flogged” is overstating people’s reactions. There’s a legitimate concern that the introduction of a new player with a substantial commercial interest may change the nature of 1P and its products. That’s clearly a risk, whether you think it unlikely or not. This industry is awash with people who were personally committed to the integrity of their products and services and then found themselves unable to make good on their commitment. No fault of theirs, just commerce in action.

I don’t have any problem with or objection to Dave T and his colleagues realising the benefits of their hard work. I hope they enjoy it. But my relationship with them is purely commercial - they provide a service and I pay for it. They must protect their interests, and it’s incumbent on me to protect mine.

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That’s not my relationship with them. They’re a vendor. We have a business relationship for so long as they’re providing a service that I value. They’re not on my Christmas card list, and there’s every cause to be skeptical of any large funding arrangement.

If this was just about “making some money” for their “hard work”, then that would not be a reason to celebrate in my opinion. That’s a super twisted view, from my perspective. I’m pretty sure they’re getting adequate salaries, and if their business decisions are made on the basis of feathering their beds that’s always to the expense of customers.

We sold a small part of the company to Accel for a minority, non-controlling interest in 1Password with no hidden strings attached.

Unless you are straight up and without evidence calling Teare a liar, what part of that do you not understand?

That’s a very aggressive and unjustified response.

  1. No-one’s suggested that Dave T is lying
  2. Not having a controlling interest does not mean that the VC has no influence. No-one in that business puts in $200M and then turns their back. If Dave T has sense (which it’s clear he does), he’ll be using their expertise as well as their money to execute his strategy for the company. That may or may not mean changes in policy or direction - the whole point of this thread is that we don’t know, but we recognise that there’s a possibility.
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No hidden strings/non-controlling is not the same as no control. Don’t put words in my mouth, and think a little more critically.

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Hey gang, this is a topic worth discussing, but let’s keep it civil.

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FYI 1Password is doing an AMA on Reddit on 11/26. They obviously want to address the issue of the funding and assuage concerns. Should be interesting.

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Worth a listen.

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I think it may be wise for them. They have become instant millionaires!