They've Sold Five LA Tech Companies and Just Raised $36 Million. Meet the Founders Behind Openpath.

Sam Blake

Sam primarily covers entertainment and media for dot.LA. Previously he was Marjorie Deane Fellow at The Economist, where he wrote for the business and finance sections of the print edition. He has also worked at the XPRIZE Foundation, U.S. Government Accountability Office, KCRW, and MLB Advanced Media (now Disney Streaming Services). He holds an MBA from UCLA Anderson, an MPP from UCLA Luskin and a BA in History from University of Michigan. Email him at samblake@dot.LA and find him on Twitter @hisamblake

They've Sold Five LA Tech Companies and Just Raised $36 Million. Meet the Founders Behind Openpath.

James Segil and Alex Kazerani are two of L.A.'s most successful tech entrepreneurs, but you've probably never heard of them because for the last 20 years they've been making bets on backend tech infrastructure. Most recently they scored a $36 million fundraise for their latest venture. And now as they look back at their careers, they've opened up their playbook to dot.LA.

Segil and Kazerani are, respectively, the president and chief executive officer of Openpath, a property-tech firm that recently announced a $36 million raise to accelerate its disruption of keycards and bring its touchless-entry technology to more doors, gates, elevators and lobby check-ins — a value proposition made all the more useful in the post-pandemic era. They co-founded Openpath in 2016 along with Chief Technology Officer Rob Peters, Chief Security Officer Samy Kamkar, and Chief Revenue Officer Phil Goldsmith.

Collectively, these five have sold five L.A.-based tech companies since 1998, employed thousands of Angelenos and watched the city's industry transform from Hollywood afterthought to spotlight stealer.

"When we started in tech in 1996," said Kazerani, who moved to L.A. after graduating from Tufts University the year prior, "we were excited if once a week there was a mention of something-dot-com." Then came Silicon Beach, followed by several behemoths like Facebook, Google and Apple setting up shop.

In the years since, Segil and Kazerani have been ahead of the curve on several gigantic tech trends. And they've attracted an inner circle of tech entrepreneurs that have helped build one big idea after another. By the time they started Openpath, the founders were able to call on people they trusted from their previous companies for the first 50 hires.

Segil envisions a future where he and his fellow executives are "going to be investors, advisors, and co-founders" for the next generation of L.A. doers and entrepreneurs. Successful tech startups, after all, often beget more successful tech startups, as employees learn on the frontlines before going on to start their own ventures. Segil likens this motley ecosystem to the "mafia" of tech stars that stemmed from PayPal and other Silicon Valley companies.

The Journey

When Kazerani moved to L.A. from Boston in 1996, back in the early days of the internet, he founded a web-hosting company, HostPro. This was long before cloud services like AWS and plug-and-play web design software like Squarespace made starting a website a simple, common undertaking. One of HostPro's web-hosting competitors, Geocities – also located in Southern California – would go on to be acquired by Yahoo! in 1999 for $3 billion, right around the peak of the dot-com bubble.

In 1998, Kazerani and his co-founder Lior Elazary capitalized on the world wide web exuberance and sold HostPro to Micron Electronics, a subsidiary of Micron Technologies, which specializes in semiconductors and today has a market cap above $50 billion. The two joined Micron, where they were tasked with building out its web-hosting division. One appealing target they found, conveniently located in L.A., was called Virtualis. Segil, a recent Harvard Business School graduate who had moved to L.A. when he was three, was its chief operating officer, working alongside CEO Chris Lyman.

But with the dot-com bubble expanding with no pop in sight, Micron wasn't the only buyer in town.

"They got a better offer from Allegiance Telecom (for $30M); they didn't sell to us," Kazerani recounted. But "as a result, James and I became friends."

By 2000, Segil left Allegiance, and Kazerani and Elazary left Micron, along with one of their first HostPro hires, Phil Goldsmith, who'd been Kazerani's college roommate in Somerville. Having ridden the wave of internet fever to entrepreneurial prosperity, the four of them, along with two other founders, bootstrapped their next L.A. tech company,

KnowledgeBase capitalized on a trend of globalization. The company aimed to help businesses share knowledge with their outsourced call centers, so that, as Segil put it, "people in the Philippines could speak educatedly about the product in Cupertino."

Again their intuition proved prescient, as KnowledgeBase sold to Talisma in 2005 for an undisclosed amount. One key lesson the founders learned, however, was that for all the work it took to build a startup with a successful exit, the size of the market matters.

"We'd worked our asses off chasing a small market," Segil said. "There are only so many call centers in the world."

Even before that realization crystallized, the KnowledgeBase founders were tempted by other potential ventures.

"Alex has ideas every five minutes," Segil said.

One such was a voice over internet protocol (VoIP) company, for which they built a prototype before deciding that it'd be best to focus on one idea at a time. This was around the time of Skype's 2003 launch, and well before the emergence of WhatsApp and FaceTime, all of which use VoIP technology.

Sensing they were onto something, they pitched it to Lyman, who bought it along with Samy Kamkar and named it Fonality. Kamkar stuck around until 2010, and by the time Lyman left in 2011, Fonality was worth nine figures.

Kamkar is a colorful character who's developed a following of his own and has helped to bolster Openpath's reputation. In 2005, the former high-school dropout-turned-security-guru designed a worm that infected over one million Myspace users. Although the impact was benign – infected users' profiles displayed the phrase "but most of all, Samy is my hero", and they unknowingly sent Kamkar a friend request – the early social networking site had to temporarily shut down to address the issue.

Openpath Chief Security Officer Samy Kamkar

The Openpath chief security officer has written about security vulnerabilities in the Wall Street Journal and commands a significant following.

"If he tweets about us we get more traffic than from TechCrunch," Kazerani said.

In 2006, as Kamkar and Lyman kept building Fonality, for which they raised over $20 million, Kazerani, Segil, Goldsmith and Elazary began brainstorming their next idea. They worked out of the Fonality office, which had lent them a conference room and three cubicles.

"We like changing industries," said Kazerani, reflecting on how he and his team have decided what to pursue next. "We think it's an incredible learning opportunity and exciting endeavor. We like disrupting. And we're trying to be meaningful, if not own the entire category."

"(When you're ideating) you have to let the river flow, (and) go with it," Segil added. "But there's a moment as an entrepreneur when you have to stop the flow and make a decision."

Back in the Fonality offices, captivated by the early popularity of YouTube, which had recently launched in 2005, they stopped the flow at the hypothesis that the world of entertainment was moving towards internet-enabled, on-demand viewing.

"We bet the entire entertainment infrastructure would switch to IP (internet protocol), so we deployed data centers in 70 locations and 40 countries," Kazerani said. These data centers became the backbone of EdgeCast, which helped to manage data traffic scurrying around between content distributors and the users who wanted to watch at the click of a mouse. Elazary could only work part-time while he pursued a graduate degree, so he brought in Rob Peters, who'd completed a triple-major at CalTech when he was 16, and was eventually made EdgeCast CTO.

Validating their vision that internet video was the next big thing, EdgeCast would go on to carry over 5% of all internet traffic, with clients like Disney, Pinterest, Tumblr and Twitter.

"When we started we had little clients; Pinterest, Tumblr and Twitter were small. As they grew, we grew," Kazerani said. EdgeCast eventually expanded to 400 engineers and was acquired by Verizon in 2013 for $400 million.

It was while working at Verizon, following that acquisition, that Kazerani, Segil and Peters confronted the problem they would ultimately aim to solve with Openpath: they were laden with keycards.

"When we look at what we want to do next," Kazerani said, "we look at industries that require disruption and we look at a pain point that we have felt...That's how we started Openpath: we actually suffered through it."

Lessons Learned

Looking back, Segil and Kazerani believe founders must put skin in the game to earn their keep and build an environment of equality. It's not enough to simply be there from the beginning; the effort and investment must be sustained. They also say building teams with complementary skills is a big help.

"When you divide and conquer, you can each excel as opposed to compete (with each other)", said Kazerani.

They also counsel building a culture of trust in which people are willing to share and listen to each other's constructive criticism – and where people have good reason to know that it is coming to them in good faith. One-third of Openpath's office space is meant for people to hang out and do things together, they said, and long tables allow the team to eat lunch together like a family.

"They take the business seriously, but they don't take themselves too seriously," said Kieran Hannon, Openpath's chief marketing officer.

Despite their repeated entrepreneurial success, Kazerani says startups aren't easy.

"Don't start a company," he advises, "unless you can't sleep well because you have to do the idea, and you're scared that somebody else will do it, and you're up for the grind."

It helps, of course, to have a team to grind alongside you.

"I don't think I'd want to do it solo," reflected Segil. "One reason I've enjoyed it is doing it with people you really like. It makes life a lot more fun."

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Creandum’s Carl Fritjofsson on the Differences Between the Startup Ecosystem in Europe and the U.S.

Decerry Donato

Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.

Carl Fritjofsson
Carl Fritjofsson

On this episode of the LA Venture podcast, Creandum General Partner Carl Fritjofsson talks about his venture journey, why Generative-AI represents an opportunity to rethink products from the ground up, and why Q4 2023 and Q1 2024 could be "pretty bloody" for startups.

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AI Is Rapidly Advancing, but the Question Is, Can We Keep Up?

Lon Harris
Lon Harris is a contributor to dot.LA. His work has also appeared on ScreenJunkies, RottenTomatoes and Inside Streaming.
AI Is Rapidly Advancing, but the Question Is, Can We Keep Up?
Evan Xie

One way to measure just how white-hot AI development has become: the world is running out of the advanced graphics chips necessary to power AI programs. While Intel central processing units were once the most sought-after industry leaders, advanced graphics chips like Nvidia’s are designed to run multiple computations simultaneously, a baseline necessity for many AI models.

An early version of ChatGPT required around 10,000 graphics chips to run. By some estimates, newer updates require 3-5 times that amount of processing power. As a result of this skyrocketing demand, shares of Nvidia have jumped 165% so far this year.

Building on this momentum, this week, Nvidia revealed a line-up of new AI-related projects including an Israeli supercomputer project and a platform utilizing AI to help video game developers. For smaller companies and startups, however, getting access to the vital underlying technology that powers AI development is already becoming less about meritocracy and more about “who you know.” According to the Wall Street Journal, Elon Musk scooped up a valuable share of server space from Oracle this year before anyone else got a crack at it for his new OpenAI rival, X.AI.

The massive demand for Nvidia-style chips has also created a lucrative secondary market, where smaller companies and startups are often outbid by larger and more established rivals. One startup founder compares the fevered crush of the current chip marketplace to toilet paper in the early days of the pandemic. For those companies that don’t get access to the most powerful chips or enough server space in the cloud, often the only remaining option is to simplify their AI models, so they can run more efficiently.

Beyond just the design of new AI products, we’re also at a key moment for users and consumers, who are still figuring out what sorts of applications are ideal for AI and which ones are less effective, or potentially even unethical or dangerous. There’s now mounting evidence that the hype around some of these AI tools is reaching a lot further than the warnings about its drawbacks.

JP Morgan Chase is training a new AI chatbot to help customers choose financial securities and stocks, known as IndexGPT. For now, they insist that it’s purely supplemental, designed to advise and not replace money managers, but it may just be a matter of time before job losses begin to hit financial planners along with everyone else.

A lawyer in New York just this week was busted by a judge for using ChatGPT as part of his background research. When questioned by the judge, lawyer Peter LoDuco revealed that he’d farmed out some research to a colleague, Steven A. Schwartz, who had consulted with ChatGPT on the case. Schwartz was apparently unaware that the AI chatbot was able to lie – transcripts even show him questioning ChatGPT’s responses and the bot assuring him that these were, in fact, real cases and citations.

New research by Marucie Jakesch, a doctoral student from Cornell University, suggests that even users who are more aware than Schwartz about how AI works and its limitations may still be impacted in subtle and subconscious ways by its output.

Not to mention, according to data from, high school and college students already – on the whole – prefer utilizing ChatGPT for help with schoolwork over a human tutor. The survey also notes that advanced students tend to report getting more out of using ChatGPT-type programs than beginners, likely because they have more baseline knowledge and can construct better and more informative prompts.

But therein lies the big drawback to using ChatGPT and other AI tools for education. At least so far, they’re reliant on the end user writing good prompts and having some sense about how to organize a lesson plan for themselves. Human tutors, on the other hand, have a lot of personal experience in these kinds of areas. Someone who instructs others in foreign languages professionally probably has a good inherent sense of when you need to focus on expanding your vocabulary vs. drilling certain kinds of verb and tense conjugations. They’ve helped many other students prepare for tests, quizzes, and real-world challenges, while computer software can only guess at what kinds of scenarios its proteges will face.

A recent Forbes editorial by academic Thomas Davenport suggests that, while AI is getting all the hype right now, other forms of computing or machine learning are still going to be more effective for a lot of basic tasks. From a marketing perspective in 2023, it’s helpful for a tech company to throw the “AI” brand around, but it’s not magically going to be the answer for every problem.

Davenport points to a similar (if smaller) whirlwind of excitement around IBM’s “Watson” in the early 2010s, when it was famously able to take out human “Jeopardy!’ champions. It turns out, Watson was a general knowledge engine, really best suited for jobs like playing “Jeopardy.” But after the software gained celebrity status, people tried to use it for all sorts of advanced applications, like designing cancer drugs or providing investment advice. Today, few people turn to Watson for these kinds of solutions. It’s just the wrong tool for the job. In that same way, Davenport suggests that generative AI is in danger of being misapplied.

While the industry and end users both race to solve the AI puzzle in real time, governments are also feeling pressure to step in and potentially regulate the AI industry. This is much easier said than done, though, as politicians face the same kinds of questions and uncertainty as everyone else.

OpenAI CEO Sam Altman has been calling for governments to begin regulating AI, but just this week, he suggested that the company might pull out of the European Union entirely if the regulations were too onerous. Specifically, Altman worries that attempts to narrow what kinds of data can be used to train AI systems – specifically blocking copyrighted material – might well prove impossible. “If we can comply, we will, and if we can’t, we’ll cease operating,” Altman told Time. “We will try, but there are technical limits to what’s possible.” (Altman has already started walking this threat back, suggesting he has no immediate plans to exit the EU.)

In the US, The White House has been working on a “Blueprint for an AI Bill of Rights,” but it’s non-binding, just a collection of largely vague suggestions. It’s one thing to agree “consumers shouldn’t face discrimination from an algorithm” and “everyone should be protected from abusive data practices and have agency over how their data is used.” But enforcement is an entirely different animal. A lot of these issues already exist in tech, and are much larger than AI, and the US government already doesn’t do much about them.

Additionally, it’s possible AI regulations won’t work well at all if they aren’t global. Even if you set some policies and get an entire nation’s government to agree, how to set similar worldwide protocols? What if US and Europe agree but India doesn’t? Everyone around the world accesses roughly the same internet, so without any kind of international standard, it’s going to be much harder for individual nations to enforce specific rules. As with so many other AI developments, there’s inherent danger in patchwork regulations; it could allow some companies, or regions, or players to move forward while others are unfairly or ineffectively stymied or held back.

The same kinds of socio-economic concerns around AI that we have nationally – some sectors of the work force left behind, the wealthiest and most established players coming in to the new market with massive advantages, the rapid spread of misinformation – are all, in actuality, global concerns. Just as the hegemony of Microsoft and Google threaten the ability of new players to enter the AI space, the West’s early dominance of AI tech threatens to push out companies and innovations from emerging markets like Southeast Asia, Subsaharan Africa, and Central America. Left unfettered, AI could potentially deepen social, economic, and digital divisions both within and between all of these societies.

Undaunted, some governments aren’t waiting around for these tools to develop any further before they start attempting to regulate them. New York City has already set up some rules about how AI can be used during the hiring process while will take effect in July. The law requires any company using AI software in hiring to notify candidates that it’s being used, and to have independent auditors check the system annually for bias.

This sort of piecemeal figure-it-out-as-we-go approach is probably what’s going to be necessary, at least short-term, as AI development shows zero signs of slowing down or stopping any time soon. Though there’s some disagreement among experts, most analysts agree with Wharton professor and economist Jeremy Siegel, who told CNBC this week that AI is not yet a bubble. He pointed to the Nvidia earnings as a sign the market remains healthy and not overly frothy. So, at least for now, the feverish excitement around AI is not going to burst like a late ‘90s startup stock. The world needs to prepare as if this technology is going to be with us for a while.

Rivian CEO Teases R2, New Features in Instagram AMA

David Shultz

David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.

Rivian CEO Teases R2, New Features in Instagram AMA

Rivian CEO RJ Scaringe took to Instagram last weekend to answer questions from the public about his company and its future. Topics covered included new colors, sustainability, production ramp, new products and features. Speaking of which, viewers also got a first look at the company’s much-anticipated R2 platform, albeit made of clay and covered by a sheet, but hey, that’s…something. If you don’t want to watch the whole 33 minute video, which is now also on Youtube, we’ve got the highlights for you.

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