Editor’s note: Total Defense, a 2011 spinout of CA’s security business, provides content and endpoint security in a cloud-based solution. In this interview CEO Paul Lipman shares information about trends in security solutions protecting organizations from cybercrime, malware and digital threats. He also shares the story of the spinout and his advice for other startups.
How did your company originate and what was its vision?
Paul Lipman: This is a very exciting time in the security industry. The threat landscape has changed dramatically over the last few years: we are experiencing unprecedented growth in the volume, sophistication and targeting of malware attacks. However, the industry has failed to innovate to address this evolving problem and is still largely providing the same products that were available two or three years ago. As a result, customers know that it is no longer a matter of if, but rather when, they are going to be breached. This has resulted in tremendous frustration.
We bought CA’s security business as a spinout and launched Total Defense in Redwood Shores, Calif. in 2011. Our vision was to create a new type of security company, delivering better protection and return on investment for customers through a cloud-based approach. Although Total Defense is two years old, we have over a decade of experience in the security business.
Is your market mostly global enterprises?
Paul Lipman: Total Defense spans from the individual consumer through the corporate midmarket. We are a global business with customers in most major markets around the world and thousands of businesses across a wide array of industries.
Please describe your product’s differentiation and how it provides business value for your customers.
Paul Lipman: Total Defense is the only security company in the world that protects the Web, email and device vectors with a unified service delivered through the cloud.
The security environment has been getting significantly more complex over the last few years, with huge growth in the volume and sophistication of cyber-threats. It is no longer enough to just run a desktop anti-virus product, as threats increasingly come through the Web, through email or directly through a connected device (what are called “vectors of attack” in security lingo).
The best way to block threats is in the cloud, before they reach an organization’s or individual’s network or devices. Think of this like stopping a burglar at the end of your street, rather than waiting until he reaches the front door of your house. The same is true with cyber-security — you don’t want to wait until a threat has found its way to your network before taking action!
Do you have an example of the benefits a customer achieved by using Total Defense?
Paul Lipman: We recently conducted a thorough TCO (total cost of ownership) study with a large customer, comparing the full cost of the Total Defense cloud security service to the traditional software and appliance approach of one of our major competitors. The results were staggering — a 5:1 cost advantage in favor of Total Defense. This is testament to the tremendous benefits of a cloud-based approach in reducing cost and complexity for our customers.
How did you determine the right pricing for your product?
Paul Lipman: We have over a decade of experience in the security markets, and our pricing strategy is determined through direct customer and partner feedback and competitive evaluation and analysis.
Describe a pitfall you were able to avoid because of a mentor or other advisor’s advice.
Paul Lipman: Several years back, CA had outsourced development of its security products to an offshore provider. Prior to buying CA’s security business, I discussed the opportunity with an advisor of mine who made the astute observation that “there is no successful technology company in the world that has outsourced core product development.” This helped inform my strategy to rapidly bring development back in house after creating the company. Today we have an incredible development team delivering new capabilities to our customers at an astounding pace, delighting customers and keeping us ahead of the competition.
What is one of your company’s most successful best practices?
Paul Lipman: Twice a year I take my whole executive team and Board of Directors offsite for two days to review the overall strategy for Total Defense. The objective of this important session is to review what is happening in our markets, our competitive positioning, key strengths and weaknesses and, from this, to develop our top priorities and financial plan for the business over the next 180 days.
This session forces the team to step out of their day-to-day worlds and think broadly about the longer-term trajectory of the business. We ultimately create a set of five critical priorities for the company, and select one of these as the primary priority.
This may sound easy, but it is actually quite challenging to winnow down all of the thoughts and ideas of a large, opinionated team to just five imperatives, and from there to identify just one as the most strategically important! I always find these discussions to be open, creative and passionate; and the output helps to focus the entire company around the things that really matter.
Who are the advisors behind your company?
Paul Lipman: We are funded by Updata Partners, a growth equity firm that has been very active in the security market. There are two partners from Updata that sit on the Total Defense Board: James Socas, who was previously a senior executive at Symantec, and Barry Goldsmith, a serial entrepreneur and the founder of Updata.
How do your scale your sales and marketing operations?
Paul Lipman: We focus on the corporate midmarket, and have experienced very rapid growth in our MSP (Managed Service Provider) channel. IT departments are becoming increasingly stretched, and security is becoming increasingly complex, expensive and time-consuming for organizations to handle. So they are turning to MSPs to provide end-to-end security as a turn-key service.
Total Defense provides MSPs with a fully multi-tenant solution that enables them to deliver a full security service to their customers, under their own brand. MSPs are eagerly embracing this unique approach: not only can they build a strong, high-margin revenue stream in security, but doing this from the cloud enables them to keep their customers highly secure.
What do the next 12 months hold for your company?
Paul Lipman: We are experiencing very strong growth rates across the business, driven by customers’ desire to achieve comprehensive protection against the latest security threats and to reduce the overall complexity and cost of their security. We will be expanding the range of capabilities that we deliver to solve our customers’ security problems and have exciting plans in the compliance, mobile and archiving areas.
How do you decide what software products to use in your business operations?
Paul Lipman: Our strict policy is to only use software that is delivered as a cloud service. As a cloud business ourselves, it is important that we eat our own metaphorical dog food. But more importantly, cloud services allow us to enjoy cost benefits, flexibility and functionality that are simply not available from traditional installed software. These are the same benefits that we deliver to our own customers.
Who is the person you’d most like to meet?
Unfortunately the person that I would most like to have met passed away earlier this year. Growing up in the UK during the 1970s-1980s, Margaret Thatcher was a transformative figure in the national landscape. For a woman from a working class background to rise to prominence as the Prime Minister who did more to change the country’s national character and attitude towards enterprise and economic growth than any other leader in living memory was truly remarkable.
Thatcher was proof that through strongly held principles, belief in oneself and an indomitable spirit, a person can achieve tremendous things. I am not saying that I try to emulate her leadership approach (far from it), but she is a fascinating and one-of-a-kind example of the fact that individuals can achieve great and profound results through a combination of belief, unfailing effort and self-reliance.
What have you, as the company leader, found it necessary to do in order to build a corporate environment that will enable your employees to move beyond the early stage of a startup?
Paul Lipman: Total Defense has been a unique blend of company stages from day one. We are a startup in the sense of being a new entity with largely a new team forging a new strategy and direction. But we have the history and operational scale of a much larger business. This has meant that we needed the whole company to act and operate like a mature company with thousands of corporate customers, and millions of consumers, while at the same time delivering the agility, flexibility and innovation of a startup charting a new disruptive course through the industry.
One of the keys to achieving this unique mix of character has been in our hiring approach. We look for people who have operated in both worlds — people who know what it takes to provide outstanding products and service at industrial scale for major customers. They have lived through the startup and growth experience and bring that critical resilience and can-do attitude that is table stakes for any new venture to be successful.
What is your top advice for first-time entrepreneurs or startup CEOs?
Paul Lipman: Hire for passion, commitment and tenacity. A natural tendency of the first-time entrepreneur or startup CEO is to think that you can do it all yourself — from coding the product to writing marketing copy to sales and everything else between. A critical leadership responsibility is to build a great team around yourself.
The most important factor in building a team is to hire for drive, motivation and “can-do” attitude. No amount of industry experience outweighs these factors. As the leader of an early-stage business, you must develop a team with a burning sense of urgency. Trade an ounce of experience for an ounce of passion every time — you won’t be disappointed.
Paul Lipman is CEO of Total Defense. He was previously chief strategy officer at Webroot, a cloud security provider, and SVP and GM of the company’s global consumer business. Prior to Webroot Paul was GM of global services at Keynote Systems, which he joined through the acquisition of Enviz, a SaaS analytics pioneer, where he served as VP of business development and sales. Earlier, Paul worked as a senior consultant for Accenture in Europe.
Kathleen Goolsby is managing editor of SandHill.com.