5 Questions with Oliver Friedrichs

Today’s 5 Questions are with Immunet co-founder and CEO Oliver Friedrichs. Friedrichs was in the news earlier this month when Immunet was acquired by Sourcefire for $21 Million. But acquisitions are nothing new for Friedrichs – this is the third time a company he co-founded has been acquired.

1. Who are you and what do you do?

I manage the desktop antivirus business at Sourcefire, since the acquisition of Immunet by Sourcefire just two weeks ago. But when it comes down to the basics, I really like to build things. Whether it is a company, a product, or a technology, having a hand in forming something new is extremely rewarding. It’s gratifying to be able to work hard and to see the results materialize based on your own work. My dad ran his own small construction business that restored historical stone buildings in Winnipeg. He worked extremely hard every day to earn a living but could not have been happier in having the opportunity to restore things back to their former glory. Everyone should be entitled to that feeling of accomplishment and that work ethic has really influenced me in what I do today.

2. What startups or companies have you been involved with over the years? Which is your favorite and why?

The very first company that I was involved with was Secure Networks based out of Calgary, Alberta in 1996. I was one of three Cofounders, including Alfred Huger (who had the idea that brought us together) and Art Wong. Alfred and I have now worked together for over 14 years through three different companies. It’s important to work with people that you can trust and count on as it leaves much less to chance and removes the unpredictable nature of working with someone that you don’t know.

I was VP of Engineering, and began building the product in a small server closet of a Nintendo 64 game company. We developed one of the first network vulnerability assessment technologies that was used to scan computer networks (TCP/IP) for security vulnerabilities. Our product was once used to test the security of a U2 spy plane while in flight from a network on ground! I was only 22 at the time and didn’t realize what a ride it would be. We worked around the clock to build a product to compete with an Atlanta based company called Internet Security Systems. We did an amazing amount of work in a very short period of time with one of our primary motivations being to beat ISS (second to building a great product of course). Everyone needs a rival, it’s an awesome motivator, and they were our nemesis. Secure Networks was acquired by McAfee in 1998 and ISS went on to become a public company that was sold to IBM for $1.3 billion almost 10 years later. Now that we are all grown up, the founders of ISS are good friends and were investors in Immunet.

For me, Secure Networks wasn’t about the money at all, that didn’t cross my mind (I was pretty impressed to be making $30,000 a year after dropping out of university and moving from Winnipeg to Calgary). It was about the challenge and because we loved what we did – I fully believe that money is not what you should rely on to motivate you in a startup. Everyone needs to get paid, but you need to believe that you are going to change the world in order to push yourself and others as hard as you need to in order to succeed. If you do this, you’ll get rewarded.

The three of us continued to work together and after leaving McAfee in 1999 we founded SecurityFocus.com. We built the biggest online community for security professionals at the time, and owned Bugtraq, the Internet’s first forum for openly discussing security vulnerabilities. This was highly controversial, since Microsoft and other vendors went through significant efforts to conceal security flaws. Most vendors have since capitulated and now work hand in hand with security researchers to make their platforms more secure. SecurityFocus did in fact start out as a dot-com (and did OK on selling advertising), but about a year and a half in we realized that that simply was going to make it; the dot-com market was crashing, and we had to go back to building real security technology that would actually help people. The great thing about having an awesome team is that you can change direction instantly. We went on to build the worlds first Early Warning System for Internet attacks. We collected security data from over 40,000 networks in 180 countries in order to see attacks as they were forming, in their infancy. We called this DeepSight Predictor, and it was used by the FBI, Department of Homeland Security, and numerous financial institutions in order to learn of new network attacks very early on.

SecurityFocus was ultimately acquired by Symantec in 2002, during a time when the market was largely still in disarray from the dot-com bust. Our product is still a core part of Symantec’s Global Intelligence Network today. One of the biggest differences between SecurityFocus and Secure Networks is that we raised $8.4M in venture capital and grew much bigger – to 75 employees. This introduced entirely new dynamics that weren’t present in our first company. It was an outstanding result for investors considering the state of the market at the time.

The most recent company, and my favorite, is Immunet. The company was started in my garage, and that’s why I have a deeper personal attachment to it than the others. Immunet was started in 2008 in order to bring radical disruption to the AntiVirus space. The AntiVirus market is a $6+ billion dollar industry with many competitors. It isn’t a winner-take-all space, but it is growing quickly and many companies prosper in it. We saw a great opportunity where a number of key new technologies became available that traditional vendors were not using – and unlikely to move to in the near future. The most important one was Cloud computing, something that Immunet used because it was the right way to solve this problem. At the time Cloud had not yet become a buzzword, it was simply the right (and obvious) architectural way to solve a problem in a space where we were seeing 20,000-40,000 new viruses each and every day. At Immunet we developed a technology called Collective Immunity ™ that uses Cloud Computing, Collective Intelligence, Data Mining and Machine Learning to do a better job of detecting viruses.

Immunet was started shortly before the economy crashed in the fall of 2008, and when it was in even more disarray than the dot-com bust eight years earlier. Despite the the chaos around you, these are the best times to put your head down and to focus on building something with the expectation that you will be in-market with a great new opportunity when things recover. This isn’t common sense though, and you need to be a little crazy to do it (well – at least those around you will think that you are).

One of the most remarkable things about Immunet was the quality of the team that came together. Early on, when we had no capital, I used relationships that were built over the past twelve years in order to develop an early version of Immunet’s technology. This included contacts in Canada, India, Hawaii and even Argentina who either worked for equity or delayed compensation until we could afford to pay them. The key point is that you can do a lot with very little and you have to be inventive. When we could finally hire our first employees, we picked the best people that we knew. Some of them had advanced doctorate degrees in computer science and others had excelled and really stuck out when we worked with them previously. Even though our team was spread across 4 countries, everyone worked great together, had a true sense of ownership, and a fanatical work ethic (it wasn’t unusual, and is still not today, for someone to work 24 hours if their code is broken – although it’s certainly not recommended).

3. Last week your company Immunet was acquired by Sourcefire for $21 Million making it the third time a company you co-founded was acquired. What advice do you have for Canadian entrepreneurs that are still looking for their first big exit?

Think big. Despite being a cliché, you need to start out believing that you will change the world and work towards that. Even though you may not build something as big as you originally intended, you’re going to build something small and very valuable much faster. This gives you the power to decide what to do with your company next. It increases your options for an early exit, and puts you in the drivers seat (versus being forced down the path of raising more funding or going out of business). If you start out wanting to build a small company then you’ve already made up your mind on how hard you are willing to push (which is of course perfectly fine and maybe that’s what you want to do).

Expect to push hard. Some people leave their jobs because they want more freedom and think that a start up will give them more flexibility; plus it sounds glamorous. Don’t count on that working unless you also think you’ll win the lottery. You need to expect to work 12 hours a day, 7 days a week and make it your life for at least the first two years, and most likely longer. You’re freedom comes from the feeling that you’re doing what you love, and the hours and days should really be going by without you noticing. If you find yourself unhappy about the time commitment, you need to ask yourself if a start up is what you really want to be doing. You’re family also needs to sign up for this, because you are going to drag them along with you. You have to make sure that they are ready for you to do this, since it’s not only your decision. If they aren’t on board, then you’ll end up letting other people down (both your family and your coworkers, because you will be stuck in the middle).

I’ve been told several times during my meetings with Valley-based venture firms that I suffer from “Canadian syndrome”. What they mean by this is that Canadian’s tend to be more humble and self-deprecating. The reason that this is a problem is that these traits are easily mistaken as weakness, when in fact they are an advantage. They’re an advantage because it’s useful to have people underestimate you in some situations. Under promise and over deliver; you avoid letting people down. That being said, the meek will not inherit the Earth, especially in the Valley. Investors are bombarded all day by pitches of varying quality, and only the A+ companies and teams have a chance. Whether you like it or not, perception is reality and it is something that Canadian entrepreneurs need to be aware of and adjust their style.

4. As a former University of Manitoba student that relocated to the Silicon Valley, what do you think Canadian cities can learn from the Valley to help reverse the brain drain that took you South of the border?

The Valley has something that is hard to replicate and cannot be artificially created. There is an ongoing buzz about the next big thing here, even in a terrible economy. People flock here in good times and bad to take their chances. It also has a lot of distractions (there is an entire social scene around startups) that are not conducive to doing anything useful and building a real company – so you need to be careful not to get caught up in those or you will lose focus.

There is a great organization called the C100 that is making a real impact in connecting Canadian entrepreneurs to the Valley. I would recommend that Canadian cities and entrepreneurs get involved with the C100. The C100 is a non-profit organization dedicated to helping Canadian entrepreneurs. They host a series of events each year in both Canadian cities and the Valley dedicated to mentoring entrepreneurs and connecting them with potential investors.

5. What excites you about the possibilities of the next year or two?

Being a part of Sourcefire will let us realize the vision that we had at Immunet much faster than we could on our own. That excites me. The company is a fast growing player in the security space, with a tremendous amount of potential and we have the opportunity to influence that. It’s a rare chance to make a difference while continuing to do what we started out doing.

When Immunet was founded, the buzz around ‘Cloud’ had not yet begun. We used cloud technologies because it was the best approach to solving the security problem. Since then, the entire software industry has adopted cloud. It’s exciting to be part of this movement, and to have been one of early players to leverage it. We’ve only touched the surface though. The software industry will be in flux for some time with many new security challenges to solve as a result of this movement.

If there is a Canadian entrepreneur that you want us to reach out to, feel free to suggest them in the comments below. If you believe you have something to share with our audience and would like to be interviewed, fire us a note to fivequestions@techvibes.com.