In the Room with Juliana Lamb and Reed McGinely-Stempel

The Room Podcast
4 min readSep 19, 2023
In the Room with Stytch Co-Founders

In today’s episode, we had the privilege of sitting down with Julianna Lamb and Reed McGinely-Stempel, the co-founders of Stytch. Stytch is a comprehensive platform for modern authentication, offering a complete suite of passwordless solutions and password-based authentication.

Reed grew up just outside of Las Vegas. From his upbringing, Reed realized that while he enjoyed the industry focus of the town, he didn’t aspire to be in an entertainment-oriented environment. Instead, he was particularly drawn to San Francisco because of its focus on inventing the future. On the other hand, Julianna’s childhood was in Sun Valley, Idaho, which existed somewhat in its own bubble. In this environment, she dedicated a substantial amount of her time to athletics and academics, as there weren’t many other distractions. Additionally, her parents prioritized travel, enabling her to gain exposure to and immerse herself in various cultures, further enriching her worldview.

Julianna and Reed crossed paths during their time at Plaid, where they personally experienced the security and user-experience limitations of prevailing authentication methods. They observed the frustrations endured by their teams, with engineers expending valuable time on building authentication solutions instead of focusing on their core product. Simultaneously, users were grappling with the inconvenience of cumbersome authentication processes. This shared experience served as the catalyst for the idea behind Stytch — a platform that is pioneering a new era of secure digital interactions.

In this episode, we delve into three key themes: building your early go-to-market strategy, navigating the current M&A landscape and approaches to engaging potential buyers, and the future of authentication.

Theme 1: Building your early go-to-market strategy

Julianna and Reed dive into their early go-to-market strategy for Stytch and highlight several crucial steps they took. The first step involved identifying a significant problem and crafting a solution. Julianna and Reed realized that a primary source of fraud stemmed from users reusing passwords across different services. This practice created a chain of liability and risk, especially when one of these services experienced a breach. The pivotal “Aha” moment occurred when they recognized that there wasn’t a suitable solution in the market for the authentication system they envisioned.

Having identified the problem and solution, they then embarked on building a product that addressed these issues, taking it to market. As they moved forward, they came to understand the vital roles played by two key stakeholders in their journey to success. Firstly, there’s the product growth persona — individuals deeply committed to optimizing user experience and conversion rates. The second significant stakeholder was the technical decision-maker — the individual responsible for choosing the authentication provider. Their deliberations often boiled down to a crucial question: “Is it Stytch or another option?” In retrospect, Julianna and Reed recognize that while the product growth advocates were valuable players, they found that real momentum stemmed from securing the endorsement of the technical decision-maker. These individuals determined whether they would migrate to the Stytch platform, thereby driving the success of their platform.

For aspiring founders, Julianna and Reed’s early go-to-market strategy for Stytch offers valuable lessons. It underscores the importance of identifying a critical market gap and recognizing the pivotal stakeholders who will drive the success of the product. Their journey serves as inspiration for those looking to navigate the complexities of product development and market entry.

Theme 2: navigating the current M&A landscape and approaches to engaging potential buyers

Next, Julianna and Reed share insights around their post Series B acquisition of Cotter, a complimentary company in the passwordless authentication space.

With the challenges in current fundraising environment, Reed acknowledges that there might be more startups contemplating similar M&A moves. He shares a critical piece of advice, “it’s only possible for someone to consider buying you if they know you are for sale.”

When recounting the acquisition of Cotter, Reed highlights that Cotter took a proactive approach by approaching Stytch. This proactive engagement made sense for various reasons and ultimately resulted in a favorable deal. This scenario prompts consideration about how to facilitate such conversations, as it may not always be a natural inclination for buyers, particularly those without a dedicated core development team, to actively pursue such opportunities outside their regular course of business.

If you are a founder looking towards M&A as a potential next step, it is important to signal your availability for acquisition, especially during periods of market uncertainty or when strategic synergies arise. This proactive approach can lead to valuable opportunities that might not have been explored otherwise.

Theme 3: The future of authentication

Julianna and Reed, through their pioneering work at Stytch, are at the forefront of shaping the future of authentication. In this rapidly evolving landscape, cutting-edge technologies like biometrics and magic links are swiftly gaining prominence. These innovations are challenging the traditional reliance on passwords and paving the way for a more diverse and secure array of authentication methods.

With Stytch, the platform not only offers a more secure iteration of password-based authentication but also presents a comprehensive suite of passwordless alternatives. These encompass biometrics, Single Sign-On (SSO), and email/phone verification, among other innovative methods. Stytch is forging a path toward a new era of secure digital interactions.

This visionary approach encapsulates the future of authentication — a dynamic landscape where a variety of robust and user-friendly methods will either replace or seamlessly complement traditional passwords. As the authentication paradigm continues to evolve, the key challenge lies in adapting swiftly to these changes and delivering solutions that not only prioritize security but also enhance the user experience.

We are so excited to see how Stytch will continue to drive innovation and shape the future of authentication.

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