CEO of $3.5 Billion Security Company Pays for Happy Hour

^{This article originally appeared on Business Insider.}

At cloud-based security company Verkada, employees are paid to hang out with each other.

“The traditional way to do this is happy hour,” Verkada CFO Kameron Rezai told Business Insider. “We thought, can we do it better?”

Verkada’s CEO Filip Kaliszan recently went viral in a TikTok discussing the 3-3-3 perk on a podcast. It’s a program the company started last April that lets three or more employees expense food and drinks if they go out together after 3 p.m.

@theloganbartlettshow 3 coworkers hanging out after 3pm = free drinks/dinner #buildingculture #employeeperks #teammotivation #corporatehacks #venturecapital #founders #startups #entrepreneurship #entrepreneurlife #techcompanies #theloganbartlettshow ♬ original sound – The Logan Bartlett Show

“The idea is it’s the afternoon and three people go out and hang out together, chances are you’ll talk about something that’s relevant or work-related, and ultimately, that will benefit us,” Kaliszan said in the interview.

As a startup, that kind of interaction is crucial for Verkada to stay competitive in an industry with tech companies that are worth $100 billion, Rezai told BI.

The 3-3-3 program expenses up to $30 per person, and requires no pre-approval, Rezai said. The only requirement is that employees post a photo in the “3-3-3” Slack channel when they’re done, he said.

Rezai told BI that all 1,800 of Verkada’s employees have participated in the program at least once. People usually post in the Slack channel four to five times a day and employees are recommended to use the perk once or twice a week.

Kaliszan said in the podcast that prior to “3-3-3,” employees could still expense the company if they went out together. But putting the name and program in place by advertising it on posters around the office is what made the difference, he said.

“It wasn’t about the money it wasn’t about the budget,” Kaliszan said. “It was about everyone knowing that this is something they can do and then everyone getting excited about it.”

Founded in 2016, Verkada is worth $3.5 billion. The company went from selling security cameras to now offering six different product lines including access control, alarms, air quality detectors, guest management devices, and intercoms.

The security company is known to have intense — and sometimes controversial — policies surrounding office culture.

During the pandemic, Verkada resumed in-person work after two months of a shutdown. Kaliszan said that remote work caused friction between engineers who were “writing essays to each other” in arguments over text.

“If we want to grow as fast as we want to grow, we have to bring people back,” Kaliszan said.

By June 2020, the company implemented a strict in-person policy requiring all employees to come in five days a week. From then on, Verkada has avoided hiring any remote workers and takes steps to prevent any situation from becoming remote.

The CEO said that one of those steps includes mapping out the time it takes for employees to get to work on their offer letters.

Verkada places a large emphasis on employee relationships and the CEO said this even influences where the company builds its locations. Verkada builds its offices in “cool” downtown areas of cities and that’s been hugely successful, Kaliszan said in the interview.

Rezai said that if business goes down, the company will have to reconsider employee perks. However, the idea of the 3-3-3 program is to decentralize these kinds of employee interactions so they can plan themselves without going through an office manager.

Based in California, Verkada has 15 locations around the world. In 2023, the company grew in size by 60% and announced it would open five new offices.