In coordination with the upcoming FORTUNE Innovation Forum in New York City, the two co-founders of Voltage Security, Matt Pauker and Rishi Kacker, have generously offered their insights on innovation from the perspective of two co-founders of an innovative start-up company in Silicon Valley. The two literally co-founded the company out of a Stanford University dorm room in 2002 after winning a Stanford business plan competition.
Voltage Security, which offers a leading enterprise privacy management platform for protecting all forms of digital business communication, has already received a number of industry awards and other recognition since its founding three years ago. Voltage has been selected as a “Top 100 private company” by Red Herring; the 2004 Top New Company and Innovator by AlwaysOn and KPMG; the winner of the 2004 InfoWorld Innovators Award; and the winner of the 2004 Network World Tops In Innovation Award. Most recently, Business Week recognized Matt and Rishi as among the Best Technology Entrepreneurs under the age of 25.
Q: In your opinion, what are the key factors that make Stanford such a hotbed of creativity and innovation?
Rishi: The cultural emphasis on entrepreneurship at Stanford is tangible. There is a continuous feedback loop starting with professors who have an incredible track record of successful innovation, entrepreneurial coursework geared to students in all disciplines, industry involvement in lectures, talks, and career building, and leading edge research even as an undergrad.
Most importantly, all this focus on innovation by the university attracts top talent looking to be part of the Next Big Thing. Voltage Security was started with a friend I met in my freshman dorm, a Ph.D. student we did research with, and a professor that we all had taken classes with.
Stanford is like any great sports franchise – when you see a tradition of winning and you are a great athlete, why would you want to be anywhere else?
Q: Based on your experience as a young twenty-something entrepreneur, what advice would you offer recent college graduates thinking about starting their own company?
Rishi: Being young with the energy and passion to begin a venture is an enviable position to be in. You have the advantage of having nothing to lose, no fear that hard problems cannot be solved, and the opportunity to choose who will be on your team.
There is a huge benefit to having fresh eyes even on old problems. In the space we’re in, many solutions had been taking the same approach for the last 15 years. Coming in to the industry with no biases on how things “should work”, we have been able to take our breakthrough technology, Identity-based Encryption, and provide lots of value to our customers.
No matter how good your idea is, the success of your business is all about the team. A new venture has so many challenges that if there isn’t absolute integrity and trust with the core team the venture doesn’t stand a chance. Choose wisely – how will this person respond when the going gets tough?
After that, be humble, embrace what you don’t know, and surround yourself with excellent people. Best of luck and enjoy the ride.
Q: Your company has been nominated for “innovation” awards by an impressive list of business publications, including most recently, Business Week. What’s in the “secret sauce” of innovation at Voltage Security?
Matt: Innovation is something that really runs in our blood at Voltage — it’s core to our vision and success. The original “secret sauce” is our core technology, Identity-Based Encryption, developed by Professors Dan Boneh of Stanford and Matt Franklin of UC Davis. They set out in 2000 to come up with a solution to a problem that had stumped cryptographers for 16 years: how can you build a system in which, to send you a secure message, all I need to know is your email address? Dan and Matt’s solution to this problem was truly innovative, combining a number of pieces of mathematics that were well-known but had never previously been used together. But the beauty of their work is actually the simplicity of the resulting system: IBE enables you to encrypt data in a way that’s easier to use and easier to manage — the two big missing pieces that have always limited the adoption of previous technologies.
But we weren’t content to let the innovation stop there; what we did at Voltage was take this initial breakthrough and build upon it. We’re leveraging IBE to create a platform for what we call Enterprise Privacy Management, or EPM, which enables enterprises both large and small to secure all their various forms of data: email, files, databases, one day potentially even VoIP. Today, companies have to handle security for each of these applications separately, which is both expensive from a management perspective and confusing from an end-user perspective. The innovation of EPM is really the ability to bring enterprise-wide data security under a common umbrella, allowing administrators to set and enforce a consistent set of policies both inside and outside the corporate network.
Q: Within the world of computer science, what are the key innovations that you think will occur within the next five years? Will the U.S. be at the forefront of this innovation wave?
Matt: What’s amazing about innovation, especially in the software industry, is that every time you think we’ve reached a new plateau, someone manages to push the envelope even further. Over the next 5 years, we’ll definitely see innovation in areas that people are starting to think about today — things like web services, new user interface paradigms, real-time collaboration — but we’re also going to see innovation in places that aren’t even on our radar today. Five years ago, could anyone have predicted that blogs would become one of our most important (and powerful) communication mediums?
In terms of who’s going to be driving innovation in the future, the U.S., and especially Silicon Valley, will clearly continue to lead. Here in the Valley, you’ve got such a unique mix of top-tier research universities, smart people, and access to lots of startup capital — the perfect recipe for innovation. But while the Valley will continue to pump out new ideas at an astonishing rate, we’re definitely going to see an increase in innovations from new parts of the world. For example, South Korea: they’re the most Net-enabled country in the world, and investing heavily in technology. And in our industry (security), Israel continues to produce both great research and great companies. If there’s one thing that the Internet has done, it’s that it has made innovation possible in places and ways that were never feasible before. That a group of people who don’t know each other, and aren’t getting paid, can get together and build an operating system that now powers more than half of the web servers in the world, is pretty remarkable.
