Photo: Greg Becker with Dave DeWalt, CEO of FireEye. Photo Credit: Compass Photographers
One of the best parts of my job is meeting incredible people doing even more amazing things around the world. Wednesday night I had the privilege to continue our series of conversations with successful and enlightened leaders on the cutting edge of technology. I spoke with FireEye Chairman and CEO Dave DeWalt in front of an audience of 30 CEOs from the Bay Area. He had a lot to say about issues that affect innovation companies of all sizes and sectors, from navigating China and managing acquisitions to finding and retaining top talent.
Dave, an SVB client himself, has a long and distinguished career in technology. He is an expert on mergers and acquisitions and is on the frontlines of the $30 billion cybersecurity industry, first as CEO of McAfee and now at FireEye. More on FireEye, which Dave took public last fall, in a minute.
He’s got a perfect perch from which to see the future of cybersecurity. What Dave had to share about international espionage is alarming, but he also is hopeful about opportunities in unlikely places, including China. What keeps him up at night? When “the cloud” moves to satellites, how do you build cybersecurity defenses with staying power? Sending a repairman to orbit confounds the imagination.
Back on Earth, Dave told me as worrisome as the threat of Chinese espionage is, there are opportunities for forward looking companies to invest there. “The truth is the Chinese are very aggressive… 55% of companies are state-owned enterprises and a big part of the operation is to level the playing field…by focusing on stealing technology out of a 45-mile radius around here.” (FireEye had revealed one of the five Chinese military men who the U.S. recently charged with espionage.)
There are a lot of ways to approach the Chinese market “in a friendly way” he says, with good investment opportunities making it worth the effort. At Silicon Valley Bank, we have found the same thing to be true. Remember, Dave counseled the audience, there are three major markets: (well, at least the first two are potential customers) Western companies doing business in China with non-state owned Chinese enterprises, which make up 45% of homegrown businesses. (State-owned businesses account for 55% of Chinese-based companies). Dave suggested picking your strategy and making sure to protect your intellectual property.
Dave, also a recognized expert on mergers and acquisitions, is the author of “Making Software M&A Work.’’ In short, he says M&As are not for the faint of heart or anyone who requires regular sleep.
When it comes to hiring and retaining top talent in this competitive environment, Dave’s secret sauce boils down to an empowerment strategy he dubs “the three As”: Give your top leaders capability and accountability, make sure to align their thinking with the company’s vision, and then give them autonomy “to go make it happen.”
And how does he find good hires? He uses a strategy of “walking up the path of the resume,” starting at the bottom looking for signs of passion by asking why someone chose a certain college or degree and what pursuits they may have outside of work - music, art, athletics. (Dave earned his Bachelor’s of Science in computer science and electrical engineering from the University of Delaware, where he was a star wrestler.) He also asks them to rank fun, learning or money. There is no right answer, but it provides important clues to motivate individuals with differing priorities.
He’s also been on the other side of the M&A equation; He’s sold companies to EMC and McAfee. Speaking of McAfee, Dave shared an only-in-Silicon Valley silver lining story with the group. On a day in 2010 that is tattooed in his mind, McAfee took responsibility for sidelining three million computers at more than 1,000 companies in 16 minutes. It put 70,000 Intel computers out of service for five days. A few months later, figuring there is a future in cybersecurity, Intel bought McAfee for $7.7 billion.
Dave joined FireEye in 2012, a long-time admirer of the work of founder Ashar Aziz, who is seeking to disrupt the 25-year-old model of thwarting cybercriminals. His solution creates virtual copies of real machines to expose attacks before they can cause damage. The company went public in 2013. Admittedly, he says, it been a roller coaster, with gyrating stock prices: “I ride the waves as they come along and work out like hell.”
And as for the future of cybersecurity, Dave predicts new models will be required as Internet infrastructure moves to the cloud and above. Satellite systems, he says, can expand bandwidth performance 100x. The winner in this game, he predicts, is going to be whoever has the embedded satellite systems with staying power for many years. As Dave told me Wednesday night, it’s going to be fun to watch.
I am personally looking forward to it.
I want to thank Dave for making the time to have this conversation, and meet with many other CEOs from the Valley. We have found over 30 years in the innovation sector that one of the most powerful roles we can play is to convene and connect our clients with each other. Sharing Dave’s trials and successes, advice and aspirations, will help others reach their most ambitious goals.
Watch this space for many more conversations with amazing people in innovation throughout the rest of this year.