Securing a billion-dollar business

| Interview

In 2004, former Sun Microsystems engineer Ashar Aziz founded network-security company FireEye, which launched its first product two years later. The company's chairman and CEO is former McAfee CEO and president David DeWalt, who joined FireEye in June 2012 and guided the company through its IPO last year. In this video interview, DeWalt discusses how FireEye is prioritizing growth to take advantage of the cybersecurity opportunity, what that means for the company's evolution, and the challenges associated with growing so rapidly. An edited transcript of his comments follows.

Interview transcript

The cybersecurity opportunity

Ten years ago, almost to the day, 2004, our founder, Ashar Aziz, developed this idea for inventing a change to the security industry. We've gone from a little company in the basement, in the garage kind of thing, to now nearly 2,000 people around the world.

Understanding your window of opportunity as a CEO is probably your most important mission. We had an amazing opportunity here. Cybersecurity has never been more important, more essential to critical infrastructure. It's never been more global. And the current vendors were doing a pretty poor job, because most of the companies were getting breached.

So we knew our window was very strong. When you see a window like that, and you see technology that we had developed be much stronger, I made a decision to grow as fast as possible in that window of time.

What we really want to do is build organically. That's job one—take the products and technologies that we had developed and expand them all over the world, leverage countries around the world to sell to, support models to develop out, inside sales, outside sales, partner models. Then, in addition, start to get good at acquiring companies to keep feeding that entire model.

Creating a market

Nobody ever heard of a virtual machine to solve security problems before. The whole world was about antivirus and blacklisting models—what Symantec and McAfee do. So the first phase of growing was education.

Nearly every customer that we engaged with, we had to explain: What does a virtual machine do? What does anomaly detection mean? What are these capabilities that FireEye brings? We had a lot of success at doing that early on. In fact, we coined a term called APT, or advanced persistent threat. That gave us the legs to begin to build a company strategy.


Grow fast or die slow

Software and online-services companies can quickly become billion-dollar giants, but the recipe for sustained growth remains elusive.

Acquiring talent

Most of the acquisitions we did were all about finding people. The people are what make these companies tick, at the end of the day, including the founders that came from FireEye. We acquired a company that founded some ideas in the mobile community, we acquired a company that was good at service-provider models—cloud models for our technology—and most recently we acquired a company called Mandiant, which was good at threat intelligence, incident responding. But again, all about the people. When you put the cultures together, from mobile to cloud to incident response to products like FireEye, we built a strong culture based on people. I think that innovation is helping the company go forward.

Managing growth

Managing growth is oftentimes the most challenging thing for companies. But I always call it a high-class problem, because companies who are going the other way have a much bigger problem. We've gone from about 200 employees 18 months ago to now 2,000 employees.

That's a huge growth trajectory to be on. We went from doing business in 1 or 2 countries to now doing business in 60-plus countries around the world. We had to build human-capital locations in a lot of areas around the world to create leverage, put international subsidiaries in place, and leverage tax and profit management.

There was a lot of challenge behind growing like that. But I think it all starts again with the people. If you surround yourself with really strong talent, and you empower that talent, you have great things that can happen. My first focus was hiring 100 managers that had experience at growing a company—and let them hire the next 1,000 people. That worked out for us. We were able to quickly bring together the best and brightest in the world, and the result is proving itself.

Growth versus profit

Our growth strategy is the same as it's been. We feel we have a tremendous opportunity to win. We feel that there is an incredible need for a strong, global security provider. When you put those two together, we think we have a fantastic opportunity to continue to grow.

We've now beat and raised three consecutive quarters as a public company. Last quarter was 132 percent growth for us, year over year. We're planning to continue that trajectory of high-end growth, but we're also mindful of profitability. So we've developed a plan, a path to profitability, that allows our investors to see that we're moving in the right direction for cash flow, management, GAAP1 and EPS2 management, as well as just balance-sheet management.

The combination needs to be there—of high growth and a march toward profitability. But right now, we're more in the 80/20, and we think growth is the most important for us.

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