Ex-McAfee, FireEye CEO talks about big new threats, switch to VC, lessons learned

Ex-McAfee, FireEye CEO talks about big new threats, switch to VC, lessons learned

 

 

 

 

Silicon Valley Business Journal | By Cromwell Schubarth | October 30, 2017

Dave DeWalt helped run two of Silicon Valley’s biggest cybersecurity companies as CEO of McAfee Inc. and FireEyeInc. but has been more active recently as an investor and adviser to companies in the sector.

Now he is formalizing that switch as a new managing director at San Francisco-based Allegis Capital, which is changing its name to AllegisCyber to better reflect its focus on data security. DeWalt talks in this TechFlash Q&A — edited for length and clarity — about his move to venture, the lessons he learned as a CEO and the new cyber threats he hopes to address — including in social networks.

DeWalt will also advise DataTribe, a Maryland-based cyber startup studio that partners with Allegis to co-found seed-stage companies in cyber security, data and analytics.

 

You were a CEO for quite a while. You’ve run some big businesses. Are you now formally past that part of your career with this move into venture?  

Honestly, I had probably 68 quarters as a CEO over 10 years. I think sometimes that you should count time as a CEO almost like dog years. I’m proud of what I accomplished at Documentum, McAfee and FireEye. It was a great ride for a lot of years.

But I faced the question after retiring from FireEye about whether I should do it again. It was on what I called my golden birthday, when I turned 52 on May 2. I turned 52 on 5/2. It was 30 years after I joined the high tech world and I thought, “you know you want to take it to the next level.”

So that meant becoming a VC?

I really want to help others learn from all my experiences, both the good and the bad. I decided that the best thing for me to do was mentor other CEOs and, perhaps, help small and even larger cybersecurity companies grow.

I fell in love with cybersecurity years and years ago. The mission of helping people and companies protect themselves against the attackers that we’re seeing from criminals and espionage — and terrorism even — was very appealing.

I see this as a whole new chapter of my career. I can help a lot of companies now with Allegis Cyber. I love founders, I love environments where people just want to make it work and they want to solve a problem. Fortunately, in my career I helped scale a lot of companies. Maybe that’s my expertise.

Is there a learning moment from your time at McAfee that stands out as important to pass along to founders?

Yes, I call it the three Hs: humility, honesty, and hard work. That sounds a little corny, but it’s really important. I learned that at McAfee, where we had done really well but we were growing a bit too fast.

We had an incident on April 10, 2010, where we accidentally launched a bad release of antivirus product that ended up hurting 1,672 companies. I remember the number and the date like it was yesterday. We were trying to solve a virus problem but ultimately our virus solution was faulty and it eventually downed a lot of computers. I ended up having to tell the world it was my fault. I was embarrassed by what happened. I pushed the company too hard and I took full responsibility.

Instead of lawsuits and things like that, a funny thing happened, which was empathy. The honesty really helped the market feel for McAfee. One of the companies that was hurt by our mistake was Intel Corp. They were down for five days as a result of what we did. But three months later they ended up buying the company for $7 billion in cash.

In a way, it was that honesty and humility that helped to attract Intel. Then Intel’s great research and development helped to make sure it never happened again.

The lesson for CEOs and for founders is to treat others in a way you want to be treated. Good things will happen if you treat your employees and your customers that way. I wouldn’t want what happened on anybody else. But it was something I learned from and want to teach others.

How about more recent time with FireEye. What was the big learning moment there?

I think it’s about humility there, as well. I felt very enthused when I took that job. I was at the height of my energy and my experience. I had been CEO twice before. I knew FireEye was a very strong company so I pushed it very hard. We grew the business from around $50 million of revenue to almost $1 billion in sales. We did it in three and a half years and we went from 200 employees to 4,000 employees.

But a funny thing happened. We raised a lot of venture money and did our business well. But investors in the public market were disappointed because ultimately they had higher expectations for the company than, perhaps, even I could deliver.

So the lesson there was the need to manage expectations. If I ever had to do it again, maybe I’ll grow it just as fast but try to really be honest and humble about it.

Now I have 14 companies I’m working with in cyber security. Hopefully, I can help them learn the same thing.

What is the biggest change in cybersecurity since your days at McAfee?

There have been a lot of changes, but probably it’s the threat landscape that has changed the most. When I started at McAfee, I called what we faced a a quantity-based threat problem. There were lots and lots of viruses. At one point at McAfee, we had 68 million different signatures of what we called blacklist files, bad things that were coming in on networks.

Now, the big threats are what we call quality-based attacks. These come from superpowers and military intelligence, and they are highly targeted attacks. We have China, Russia, America, North Korea, Japan — I could go on and on — a lot of major governments are now involved in the offensive side of cyber. As a result, the cybersecurity market is, A, very large, and B, very complex.

But that also means there is a lot of opportunity here to build companies for the good of the world and ultimately solve these complex problems.

In the grand scheme of things, it’s a much more dangerous world that we live in with cyberspace than it’s ever been and it’s only getting worse, unfortunately.

So what do you see as the biggest investment opportunities in cybersecurity right now?

There are a lot of traditional problems in IP networks but I’m quite interested in some things we are seeing in the industrial areas — manufacturing, the energy grid, the water supply and the transportation industry. They aren’t on a core network. They’re on what’s called an operational network typically used in industrial sorts of control systems and the attackers are going after these industrial systems. If they succeed in taking out our energy, our water, or our transportation, obviously, we would have big issues. One of the companies I work with, called Claroty, from Israel, is very focused on this industrial platform.

Then there are threats to things like the Internet of Things, which is exactly what ForeScout Technologies is focused on. They manage and monitor the IoT devices on your network, helping to keep them secure.

In addition to industrial and IoT threats, the other two areas that I’m very focused on are social domains and satellites.

Satellites are connected on the ground to a lot of consumer and also industrial technology. Securing their air-to-ground transmissions is going to be a big future problems that we have to solve.

Tell me more about the security threats you see in social networks.

We’ve learned from the Russian influences that occurred in our election process that social networks are very vulnerable to influence and to tampering with the integrity of their content. So we’re looking at a lot of areas to invest in around the growing social networking domain. I think it’s one of the most untapped domains we have in the world today, in terms of safety and security.

While I was at FireEye over an eight-year period we faced growing intellectual property wars between the United States and China and Russia. We responded to more than 5,000 American intellectual property attacks by China at FireEye. China went up to that level in its attempt to equalize itself with the great powers in the world. Now Russia has discovered the power of the information war and the ability to alter society’s perception through content and information that is the backbone of social networks.

We need to look at what kind of security we have to track anomalous behaviors that are happening in a social network. For example, how many identities does somebody have and how many false identities do they also have?  How do I track their content and their behavior online?  Do they have any deviant behavior — something that might embarrass a company or something that might be terroristic in nature?

Our ability to track events and incidents across social domains is almost the same problem that we have tracking events around network domains and tracking malicious behavior or insider information. We need to address those.

One of the bigger problems that we’re facing today is the integrity of information and integrity of identity. There are a bunch of really interesting startup companies that are emerging in this area and, in my humble opinion, in the next two to three years will be major, major cybersecurity points in the world.

 

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