"We're fortunate we are in the middle of a second industrial revolution"
CloudShare CEO Zvi Guterman talks with Michael Matias about getting caught up in the wave of innovation and his preference for the B2B sphere
For Zvi Guterman, crypto is exciting because it is really complex, yet also very practical. Also, he says there are so many areas within the field that are open for new researchers and entrepreneurs to step into. He says learning new things and changing the world are what makes him love what he does as CEO of CloudShare. He’s seen a lot of change there in his 14 years, but solving new challenges gets him excited. In an interview with 20MinuteLeaders creator Michael Matias, he encourages entrepreneurs to seek out the problems of unfamiliar industries with the aim of starting B2B companies rather than focusing on consumer products because the B2B market is bigger and often more rewarding.
I'm excited to talk about cyber, about the cloud. But even more, I'm excited to talk about the journey of a serial entrepreneur. How did you get started with computer science? What is really your passion with what you're doing?
I started my career actually because I love technology. Like many others, as a teenager, I was playing with computers in the early days. As I was growing, we got the first computers to Israel, and it was amazing. You can write code and do something, play games, and you can start having this device do things for you. I think we were lucky, and I'm fortunate to be able to witness that. We're fortunate we are in the middle of a second industrial revolution where the computer is changing. Hopefully, we are able to change so many things that were impossible before. It's only the beginning. That's my view of this world. I'm excited every day. What I love about what I do is that we learn, we try new things, we change the world a little bit, and it's wonderful to do that.
Take me back to your childhood. I am assuming that most kids weren't necessarily as excited about this technology as you were. What was that experience really like?
I should add that I wasn't good enough in basketball and soccer. I guess you compensate. So, I was very good with math and computer science then. It was the early days of computer science, and it was so exciting. My mother really wanted me to go to med school and was encouraging and pushing. Computer science was a new thing, so it wasn't very established. But I really had the passion and they supported me. Then one thing led to the other. I kept finding new things. Then a friend told me, "Hey, let's start the company together." That turned into my first security company. I think we are fortunate (to live now); a lot of things are just timing. It's such a wonderful opportunity; the world is changing and you are in the right spot. So, it's not that we are smarter than other people, but in many cases just we were in the right time in this wave of innovation. If you ask me where do I want to go next with my company and other companies if I'm looking and joining on the board level or investor, it is finding innovation. Finding something that is not trivial that software can improve. And we see a lot of innovation around health and around enterprise IT that keeps improving our work. That's what gets me excited.
You were doing your Ph.D. from 2004 to 2008, but you were the CTO of Safend from 2003 to 2006. You were basically starting and sold the company while you were doing your Ph.D. in Hebrew University, correct?
Yes, and I won't recommend it to others. It's not the best path. You can do better. I feel that I didn't contribute enough to Safend. I would encourage other people to focus on one thing and try to do that all hearted. I really enjoyed the academic world. I found the research actually on security in crypto. Even on that side, I really was focusing on how to bridge the complex math crypto world and the real world and find real solutions to these problems.
If I look at the things that early and young entrepreneurs are creating, they're not usually in the crypto world. They're in the consumer world. Can you give me a little bit of insight into what is so exciting to you about the complex math, cryptography, cloud-based solutions that you've been working on?
In my career, I actually dealt more with B2B and enterprise businesses. When I meet young entrepreneurs, I would say two things. Usually B2B startups are 10 times more successful (financially) in the end result, more rewarding. And about 100 times less competitive, usually. It's natural that we come up with more consumer ideas because we are all consumers. I would encourage someone to look at the industry and go find a CIO that works for oil and gas and ask to join him for a day or maybe for a week. Do an internship, and see what kind of challenges they face. You'll be amazed that people are dealing with huge markets and problems that are just far away from you.
I have a good friend. She works for Pfizer and she shared with me (three years ago) just the complexity of the FDA system that deals with the experiments. She kept telling me that's a place for innovation. Every founder that came to me, I said, "Go speak with her." You're targeting 20 companies, but that's an important area. Now (with Covid-19), this is so important. People are dealing with that daily. The enterprise market is big, interesting, and usually somewhat easier and more rewarding. Again, if you are passionate for something, go with it.
What I found about crypto, which I think is amazing and unique to that domain, is that actually crypto is the junction of many things. One: complex math, like complexity and combinatorics and a lot of really interesting things. Second, it's one of the most practical things we deal with. So, the fact that crypto had an amazing influence on the Second World War, when you think about the enigma, and what we are using now and the security challenges that Zoom had and many things. It's super practical, very interesting on the academic level. So many problems are still open. I think for young researchers and young entrepreneurs, there's a lot to do. We still face a lot of challenges.
You see a lot of the innovation these days around multiparty computation. This is actually one of the most advanced things in crypto. A lot of research in recent years around how we break a secret between five people that any three of them together can open the safe, but one or two together cannot do anything. Or how do we take something very complex and very important and distribute it between different computers and allow each of them to do a slow computation? Then if you break into one of them, you will not learn anything about the secret. There's a lot of interesting innovation. It's also very challenging.
I'd love to hear a little bit of your 14-year journey through CloudShare. What is it like running a company for 14 years? I don't think many entrepreneurs get to have that privilege.
It's definitely a long journey. On average, it's 10 years and you should find out first if you are in the right room, that you're doing the right thing. It looks glamorous and you may think that I'm just celebrating between cocktail parties, but the reality is that it's really hard work. There are a lot of fires when you manage people. You need to hire, you need to grow. Sometimes, things are not working. I found out throughout the years that I'm really excited about working with people, setting the strategy, solving all of these challenges.
The company changed itself along the way. We started as all-around IT and the need to configure virtual machines, but 14 years after, we talk about business acceleration cloud. We try to help people do more business and allow them to grow their business. We almost sold the company at least once. I didn't do very well on the board level. I made many mistakes. The board brought in the very seasoned CEO. It almost killed the company. I witnessed a lot of things.
What are three words that you would use to describe yourself?
It's product, technology, and business.
Michael Matias, Forbes 30 Under 30, is the author of Age is Only an Int: Lessons I Learned as a Young Entrepreneur. He studies Artificial Intelligence at Stanford University, while working as a software engineer at Hippo Insurance and as a Senior Associate at J-Ventures. Matias previously served as an officer in the 8200 unit. 20MinuteLeaders is a tech entrepreneurship interview series featuring one-on-one interviews with fascinating founders, innovators and thought leaders sharing their journeys and experiences.
Contributing editors: Michael Matias, Amanda Katz