03 Apr 2015
Blocking Bad: A Flare for Internet Security

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Welcome to "The Business,” the official podcast of Harvard Business School. The very fact that you found us online means you've got a big stake in today's topic.

I'm Brian Kenny, chief marketing communications officer at Harvard Business School. Our focus on this edition is: hacking, spamming and crawling— the nasty stuff aimed at all of us who use the web. Our guest is an HBS grad who co-founded a company aimed at blocking the bad guys online.

Let's face it, we're all vulnerable to random cyber attackers. The list of small companies and even multinationals that have fallen victim to targeted attacks just keeps growing. The results aren't pretty. But they are costly.

In some cases, the cost can be measured in lives, especially when the online bully is your own government. The government of Syria is accused of pulling the plug on the Internet in the entire country more than once. Within two minutes, everyone in the country was offline. Human rights organizations say that when the government shuts down the net, it ramps up military attacks.

Michelle Zatlyn has made it her business to help other businesses ward off cyber-attacks and keep a website up and running. She's a co-founder of CloudFlare Inc., which she sees as a tool to make the Internet a safer place to operate:

MZ: Our mission at CloudFlare is to build a better Internet. What that really means is our customers or anybody with a Web property (a website, an app, an API) can sign up for our service and ensure that the content loads quickly around the world. We protect our customers from a range of online cyber-attacks and we make sure they're always online no matter how much traffic they get.

We started in 2010. I met one of my business partners at HBS and then there's a third co-founder, Lee Holloway, the technical co-founder, and we started to work on this and in the last 4 1/2 years since we've been available online to sign up as a service, we've grown very quickly. We've gone from no customers to over two million customers around the world and today we're at a point where we have about 5,000 new customers signing up for the service daily.

BK: What sparked that idea? How did you come up with the notion that this would be a good business idea?

MZ: Well, that's one of those things where I like to say that opportunities present themselves anytime, anyplace and you've just got to decide when to go for it. In the case of CloudFlare, Matthew and I were classmates, we were section mates, Section D (go D!) at HBS. We knew each other, but we weren't close friends, we didn't hang out on a regular basis. But Matthew was always this big idea person and every time we'd be at section drinks or out he'd be pitching me different ideas. And all of his ideas were smart and clever, but I often said, “hey, that's a good idea, that's a good business, but not something I want to get involved with,” because I just wasn't proud of the overarching mission of the company.

So fast forward to our second semester, second year, January of 2009. If you remember January 2009, it was a pretty bleak economic environment and the School always organizes these different immersion programs around the world and they take groups of students to India or China or Israel to understand conducting business in this global environment. Well, it was the first year that the School was doing a trip to Silicon Valley and so I signed up for that and it was this magical week because it was 50 students, some first year, some second year, that came out to Silicon Valley for a week. It was all the students who really had an entrepreneurial spirit that signed up for this program. Some wanted to be the investor, some wanted to start their own company, and others were just looking for an interesting company to join and it was through that week that the School did this great job organizing meeting the investors, meeting all these entrepreneurs (and Matthew was also on this trip). It was halfway through the week where we had heard so many stories, session after session, where I kind of had this realization, “wow, coming to California to start a business wasn't so out of reach. All these people can do it, so can I.” So Matthew and I started to refine an idea literally on the spot that was inspired out of something that we had done before called Project Honey Pot. It was this open source project that him and Lee had worked on that tracked Web spammers online. I did not know anything about that domain of expertise, but he had told me that 80,000 websites had signed up for this and that it was hard to sign up (they had no budget) and I just didn't understand how 80,000 people had found out about it or why they were signing up because there was no direct benefit. And he said, “well, one day they want us to set up a service that actually stops the online attackers.” And I said, “huh, that's something I could be proud to work on,” and that’s where it started: “let's do this as a school project this semester.” We pitched our professor, Tom Eisenmann, who was leading the trip, by saying, “hey, will you take us on as students this summer to be our adviser?” He said, “I already have a full plate, but I will because it's you guys.” And throughout the semester each month we kept making progress where it was like, “wow, there's a real problem here.” And then the next month we'd come back and they'd be, like, “oh wow, there's a really elegant way we could solve this problem at scale.” Finally I remember just this “aha, wow, there's a real business model here” moment. When I graduated I was supposed to work at a great company called LinkedIn. Matthew was supposed to go do his own thing, but instead we packed our things in a U-Haul. Matthew and his mother drove them across country from Boston, and we started CloudFlare.

BK: That's a great story. Did you always know that you wanted to be an entrepreneur? Did you always identify yourself as one?

MZ: What I knew for sure when I was going to business school is that when I graduated I wanted to go be part of a team that was going to go help change the world. The way I described it was a Google before there was a Google. Starbucks before it was Starbucks. One of these companies where they were on to really big things and I wanted to join early and be part of the team that helped make it happen. If it was my own idea, terrific. But that was not a condition and so when I look out (you know, we graduated 5 1/2 years ago) that's exactly what we've done and we're still just getting started at CloudFlare. Today we have 150 employees. We're on this high growth curve and I think we really are building one of these big, important tech companies that has a chance to go public in the next two to five years that's really going to help transform the way the Internet works.

So, I knew that whatever I did I had to be part of something that was going to go make an impact, and if you call that entrepreneurial then yes, I've always had that. I often say, and I said this the other day actually, you don't have to start your own company to be entrepreneurial. Everyone that works at CloudFlare is entrepreneurial because we're solving problems on a daily basis and having to make progress with resources beyond our control. So, yes, I guess in that case I've always been entrepreneurial.

BK: Do you ever have a moment where you’ve said, “oh my God, I probably shouldn't have done this.” A moment of severe panic or doubt about your decision?

MZ: When you start a company, in those first few months that first year, they're very lonely. You're making progress, but you're making progress pretty slowly. So it was hard. Often I'm living in California, where I knew nobody, and a lot of classmates would go join companies where they were making a salary and getting signing bonuses and here we were living with no salary and I was really trying to keep my costs down. So I wasn't going out and I was just thinking, “I hope this investment pays off.”

BK: I want to talk a little bit about the climate for women who are leading technology organizations. You were just featured in the alumni magazine here recently on this topic. When did you know that technology would be a path that would interest you? Was it just the mission and the thing that the technology could accomplish or is the technology itself something that interests you?

MZ: Before, I really wanted to be a doctor. From the time I was 12 years old to 24 years old everything I did in my life lined me up to go to med school. And why I wanted to go to med school is I wanted to help people and I thought through medicine that was the only way to do so. What I've realized through technology, and I think why I love it so much, is you can help people at massive scale in this industry and that's what draws me to technology. For my company in San Francisco (and again a team of 150 people, sure, we're going to grow to 260 this year and 400 next year), this small team in San Francisco means that anyone around the world has a faster web property, is safe online. We protect folks from these massive online attacks and they say to us, “I couldn't report on human right abuses in Angola if I wasn't using CloudFlare.” The reason why I love this industry so much is that I can help people through technology and that's really how I fell in love with it.

BK: There's been much written about the notion that technology as a sector is kind of a boys' club, and despite all the emphasis that's been placed on STEM and trying to get girls exposed to the field at an earlier age so they take up an interest in it, the numbers seem to be going in the wrong direction. Did you feel that you had a harder road to travel because you're a woman in the technology field?

MZ: So, there are definitely fewer women than men in technology. That's true and I'm optimistic for the future that will change. And, anytime someone mistreats me or I feel I'm not being treated fairly, if I am in a position where I can say something, I'll say it on the spot. And otherwise I just quietly spend a lot less time with them and spend more time with those treat me equally.

BK: One of the things that the article talks about is this notion of a double bind, what Janet (Janet Kraus, who's an entrepreneur-in-residence here at HBS) describes as the tension between being viewed as competent or being liked. Is that something that you feel you've encountered in some of your dealings?

MZ: Yes. And all the research shows that too where it's very hard to be, as a woman, both competent and liked. It's a very fine line. As a leader in a company sometimes it's not about being liked, it's about being respected. When I come to work every day and every action I take, every decision, it's really: is this fair, is this in the best interest of the company, if this came to light or if someone questioned me about it could I look them in the eye and explain why it was the right decision? But, absolutely this double bind, it's really hard. You feel lonely, you don't talk to people about it. It's not something you go home and say, “wow, what am I going do about it?” But, again, I think long term it's delivering results, being a long term player, doing the right thing for the company, treating people fairly. And I'm an optimist that those things will come back to pay off properly for any business leader.

BK: For VCs that might be listening to this podcast and have not taken entrepreneurial ideas from women seriously in the past, what would you say to them?

MZ: You're doing yourself a disservice. I think that there are amazing women out there who think differently, who are approaching problems differently, who are solving different problems that haven't been solved in the past. And if you're an investor, your job is to deliver ROI to your LPs, to your investors, make that extra effort to get outside of your comfort zone, because what it is is a comfort zone. And, just from my own personal experience, if you met Matthew, Lee, and I 6 years ago when we started CloudFlare, we were very different people. Everyone who knew us, especially who knew Matthew and I because we had a lot of classmates, no one could understand why we were starting a business together. It was not obvious. It was like, “you're gonna start with Matthew?” And people would say to Matthew, “you're gonna start it with Michelle?” And then later you layer in Lee, who's this technical co-founder, and if you think of a Venn diagram, we had a tiny bit of overlap, but we covered a lot of surface area and we had a shared vision and we trusted each other. So we had enough overlap where we could communicate, but it was uncomfortable in the sense that it was not obvious. So I think for investors, they often pattern match against things they've seen work in the past and that can be very powerful, but it can also be very dangerous. I think that if you're an investor, target someone who who looks different, who has a different background, maybe give them the benefit of the doubt. Spend the half an hour with them. Spend the 60 minutes. And be open to the possibility that the next wave of entrepreneurs are going to look different than the patterns you've seen in the past.

BK: That's great Michelle, really good stuff. Thank you so much again for taking time out of your day. I really appreciate it.

MZ: Thank you for having me.

That, again, is Michelle Zatlyn, co-founder of the wildly successful Internet security company called CloudFlare.

Our next edition of "The Business" comes your way in two weeks.

“The Business” is the official podcast of Harvard Business School. We publish twice a month at hbs.edu/thebusiness.You can find all of our interviews there. If you’ve got a topic you’d like us to address, let us know! You can tag your comments and questions using #TheBusiness. And subscribe to “The Business” on iTunes and iTunesUor follow us on SoundCloud.

I'm Brian Kenny. Thanks for joining us.

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