Andrew: Hey there, freedom fighters. My name is Andrew Warner. I’m the founder of Mixergy where I interview entrepreneurs about how they built their businesses. I woke up at 5:30 this morning. I raced over to the office. I didn’t need to really race. Let’s be honest. I sat quietly in an Uber and comfortably got into the office. But I got here really early because joining me direct from Israel is the CEO and founder of Israel’s largest publicly traded company, a man . . . not to embarrass you, Gil, I don’t know if it would embarrass you, but a billionaire who’s self-made who did it by helping companies protect themselves.
Joining me is Gil Shwed. He is the co-founder and CEO of Check Point. They are the world’s largest pure play cyber security company. I invited him here to talk about how he built his business. And we can do it thanks to two phenomenal companies. The first will help you hire great developers, which is called Toptal, I should say. And the second is a company that will do email marketing right, it’s called ActiveCampaign. I’ll talk about those later. Gil, did it make you uncomfortable that I said that?
Gil: No, it’s fine.
Andrew: You seem okay with it. Good. Can you give me an example of what Check Point does? I think I read in one . . . there it is. It’s your annual report. You said, “Our products are complex.” I said, “Well, yeah.” In an hour, I’ve got to explain this to myself and to my audience. Do you have an example that will help us understand it?
Gil: So I think in general what our product started with, we have now a much broader portfolio is basically control what traffic can go from your network to the internet and vice versa. And maybe I’ll give a simple example. When I tested my first product in 1993, it wasn’t even a product. It was a first prototype. And we weren’t actually even connected to the internet. But we took the product to the company that invested in us called the BRM, then it became an investment company. And we connected their network for the first time to the internet. We put our gateway that controls web traffic flow. We set what we call a policy that says let everything go out. So people can browse the network, access whatever they want. Don’t let anything in. Don’t let people access our computers and so on.
And within 5 or 10 minutes, I suddenly see an alert on our console but says somebody is trying to break into the network. Being a developer, when you see something like that then your immediate reaction is there’s probably a bug in the software. It’s the first time you’re run it and already find something but actually analyze all the data and all the IP addresses looked real and not garbage. And it actually knew there weren’t that many people connected to the internet back then in Israel, so actually knew the company which was trying to break into our network. And I called him up and I said, “Who’s trying to break into our network from your side?” And he said, “Of course, it’s not us but why don’t you come visit us and check what’s going on in our network.” I went there.
I found that some people have super user rights from older computers. I’ve traced it back and found that pretty much all the companies which were connected to the internet back then in Israel were getting from one another and interconnected in the wrong way. We involved the police and surprisingly enough, again, think about it in terms of years 1993. In a week or two, the police was able to arrest two teenagers that basically had access to pretty much all the companies in Israel, investing the first 10 minutes that we ever ran the product.
Andrew: And those teenagers were trying to do what? Just look around?
Gil: Look around, steal data, gain access to computers. Eventually that will turn into bad stuff because they overloaded. I mean, today, what we’ll do is run ransomware that will make your data use less or like in the past, they will create damage or steal your data, which is, by the way, happening every week on the largest companies on Earth.
Andrew: Yeah, I noticed. I don’t think most of us know about Check Point, but we do see your name a lot in the news. Like I looked at . . . Here’s an article about Microsoft. “Microsoft refutes claims by security experts Check Point that firewall virus found earlier this month and infected a quarter of a billion computers.” Here’s another one, “Check Point finds a flaw in hit game Fortnite that could have let hackers break into user accounts.” And on and on and on. Usually, when we see these reports or often when we see these reports, it’s Check Point that is the company that uncovered them. I’m watching you, by the way, Gil, as you’re trying to get comfortable in that seat. How you doing? What time is it where you are right now?
Gil: No, no, it’s 5:00. It’s okay. I just don’t feel comfortable sitting in one place. I always like walking around and that’s the challenge.
Andrew: Tell me about that. Like have you always been that way the type of person who couldn’t sit still?
Gil: Yeah, I was always like hyper energetic moving. Sitting in a classroom at school was my nightmare.
Andrew: Mine too. My dad eventually negotiated with the teachers that I could sit in the last row. So I could stand up and not disrupt the kids behind me. For you, do you ever have a moment where you sit down at your desk or is it a stand up desk?
Gil: No, when I sit at my desk when I concentrate and I think like when I used to be a programmer, that’s the time that I can sit for hours. And, you know, when my mind is taken by the computer and I’m challenged with something that I can do, just sitting when I speak I feel the urge of walking around and so on.
Andrew: I do wish that we could just walk around together and have this conversation. I feel comfortable that way too. You know, usually at this time part of the interview, I’ll ask my guests, “What’s your revenue?” and they’ll reveal it. But in this case, there’s nothing to reveal. It’s a publicly traded company, $1.9 billion in 2018. Am I right?
Andrew: All right. So let’s go back in time and see how you built it to the point how you got here. I heard you grew up in Jerusalem. Can you give me a little color into what your life was like as a kid in Jerusalem?
Gil: I was a pretty normal kid. I mean, an average family. Again, average family, 45 years ago, it was much less than an average family today. But, I mean, I was very much exposed to a lot of activities. My parents sent me to all the extra after-hour school activities, which I didn’t like most of them from . . .
Andrew: Why did they do that? What were they hoping you would do with that? What were they hoping you would become?
Gil: I don’t know what they were . . . they never told me that they had some expectation for me. But I think they did the right thing. They exposed me to everything with . . .
Andrew: Like what? Give me an example of something that’s a little bit out there that they exposed you to?
Gil: I mean, I used to go once a week. We had like a once a week film, cinema and show the film for a younger kids. And I used to go do chemistry lessons and music. And, I mean, really all sorts of activities with the . . . every day I had some activity. Swimming, which, you know, Jerusalem is in the mountains. So the joke on people from Jerusalem that we never know how to swim. So we were in a swimming team. And that was my biggest nightmare going three times a week and exercising.
Andrew: Programming is something you took to early on. You grew up in the ’70s, by the way, when programming was not the cool thing to do. How did you get involved in programming and computer programming?
Gil: I think part of it is my father was a programmer and a few years before I started he did some course of learning how to program. So that’s probably he have something to do with it. But when I was in the fifth grade when I was 10 years old, and again, I did all these other activities. And I liked some, didn’t like most of them. At the age of 10, I saw at the school that says programming course in this community center, which was actually far away from my house. And I said that’s the one I want to register to. And that’s what I did. And then I would take the bus after school, get very early, hoped that they’re still opened. If they weren’t open, I would have to wait two or three hours outside. If they were open, they would let me in and leave me locked in so I can program and that’s how I started programming.
Andrew: What did you program back in the ’70s?
Gil: I started with basic programming, which was the first microprocessor before the first personal computers. Even I think before . . . no, I think the Apple II may be already existed but we didn’t have it. So it was the first 80 or 85 Intel microprocessors and we learned the basics, we learned assembly, and that was a big magic, you know, turning computer to do anything for you.
Andrew: You got deep into it. Did you know where you were going to take this, what you were going to do with it?
Gil: At that stage when I was 10 I didn’t, but at the age of 12 I actually got my first job in a company but it’s strange it sound because we’re talking about the late ’70s. We did the computer assistant translation pretty much what Google Translate does for us today.
Andrew: Get out. Really?
Gil: Yep. Today, it looks very normal to us. Back in the ’70s, it looked like really science fiction. And it was and this company built a solution. We did automatic translation. So that was my first summer job. I was doing more the demo software and to show how the software works, not the actual algorithmics. And at the age of 14, I already got my first job as a system administrator in the university in Jerusalem.
Andrew: Wow. That’s a high responsibility job at such an early age. And you felt comfortable with it? You didn’t feel like, “This is out of my depth. I’m too young, nothing.” Nothing?
Gil: No. It was really interesting for me and I learned and by the age of 15 or 16 I was even appointed to be the team lead. And I got the two, three employees, which were students working for me. Both became, by the way, computer science professors later. So I had good employees.
Andrew: Yeah, you’ve connected with some really impressive people, which I hope to get to in a bit. There’s compulsory military in Israel. You went in, you did intelligence work. What can you tell us about that?
Gil: When I joined the army, there are many programs in Israel when they’re young . . . most people go to the army at the age of 18 and really becoming real soldiers. Few can go to programs that they go to academic studies before the army and postpone first service. And when working with profession, I didn’t want to join any of these programs because I felt it will delay my life in too many years. So I actually went to the army. They did recruit me into the computer unit when they expected me to introduce to them things like Unix systems and open systems that were making their first steps into the market. And that’s what I did based on my experience from the university. And I was building different types of computing system. Networks, programming new stuff, and it was a very, very interesting service because I served with amazing people in different fields that you never get exposed in life to.
Andrew: Let’s talk about them. Did you find . . . actually, Shlomo Kramer, one of your co-founders, you didn’t meet him through the military. You met him through his grandmother as I understand it?
Gil: Oh, no, I met him at the army. We served . . .
Andrew: At the army? You did?
Gil: He was doing one of his program. As at the age of 18 he went to do his computer science, BSc. And he joined at the age of 21. I joined I was 18 or 18 and a half. And we started together. Yes.
Andrew: And so you said earlier, “I didn’t want to delay my life.” I wrote that down. Because it seemed like there was significance there. What did you imagine you were going to do? What were you waiting to get to and didn’t want to delay?
Gil: First, I knew that I wanted to do something with computers, maybe an entrepreneur. I wanted to build my own product. But just to understand what not to delay my life, you can go to the army at the age of 18 and leave it by the age of 21, 22 and when you have all your options open in your life, or you can go to one of these programs when you go to university for three years, then go to the army not for three years but for six years. That means that by the age of 17, you need to make a decision where you will be at the age of 27. And when I was 17, even though I had a very good sense what I want to deal with computers, I felt with at the age of 17, you can’t decide what you want to be when you’re 27. I want to keep my options more open.
Andrew: Okay. All right. But you didn’t know that you’re going to do something where you were on the lookout for cofounders or were you just saying, “Let’s see what happens?”
Gil: No, at that stage I just said, “Let’s see what happens.” I didn’t have . . . I mean, when I went to the army, I mean, I was still in learning phase. I mean, I already had experience. I worked in many companies. By the way, when all the time I worked in like three different places in parallel. I was at the university. I was at the army. I worked at some global companies that were doing some work in Israel. So I was always on the lookout for learning and exploring more of the computer.
Andrew: Really? How many hours do you sleep?
Gil: Not much. But I think as human beings, my theory, I think we are hardly getting from our self, say, 30% of our potential. We can do much more. And I’m talking about myself.
Andrew: You feel like you still are only tapping 30% of your potential and there’s more in there? How many hours do you sleep?
Gil: Five, six hours. Four or five hours usually.
Andrew: Four or five hours?
Andrew: Wow. All right, what led you to found the company Check Point?
Gil: So, I mean, when I left the army I already knew that I want to build my own product. But I didn’t actually have the right idea. I got the idea for Check Point. I got the idea at the army. Maybe I’ll start this story from scratch. One of my projects at the army was to connect two classified networks. They were literally behind the wall from one another. But they were very, very classified and what was the early days in the late ’80s, like 1990 that people started connecting computer networks. And what I was tasked with is how do I connect these two networks and keep the security of my network which was the more classified one.
I didn’t find good solutions in the marketplace. I wasn’t looking to the write something. I was looking, what solution can I deploy? So I came up with a simple idea. I’ll define the simple language would describe communication protocol. I would translate that into some engine like a virtual machine that analyzes the traffic and it will run very, very fast and create the right behavior. We’ll screen the traffic and allow only the right traffic to come through. I implemented that idea. It was a few week project and it worked. So when I left the army, I already knew that that’s a good idea. It worked, it was real. We’ll answer the real need. And that was the year 1991.
But when actually I looked at that idea and I said that there is no really exciting market for it, going to some bigger organization and convince them that their network needs to be compartmentalized or classified. Not such an exciting market. So for two years, I did completely different things in the field of printing material, handling, consulting to companies, worked in three, four places in parallel. And then ’93 arrived. And in ’93 something pretty big happened. And that was the internet changed from academic network that’s opened only for universities. An open network but any company in the world can connect. And it’s that point, the first question that a few dozen companies that connected to the internet asked was, okay, we’re connecting with 15,000 universities out there. How do we prevent all these students from getting into our files and into our networks?
And that’s when I said, “Wow, I got the idea of how to do it.” And especially for a young . . . I wasn’t a kid but the young person in Israel, I said that the internet can really change the world. Today, it’s hard to imagine that in the world what you don’t have email, you’re in a faraway country. And if you want to communicate and hear what’s going on in the world, it’s a process that takes weeks by letters or you rely on the printed newspaper. That’s the information that you’ve got. I want to look for a new product, a new computer, if the local distributor will send me a month later after the product has come out the grocery . We know that it happens. If not, I will wait, you know, two months until I get the new way Unix World Magazine to learn about something new. And that’s the information that they were there. You know, the small piece that’s written in the newspaper.
So for me, the internet, the fact that I can communicate with everyone and find that information, I said that will make a big revolution to the world. And everybody needs the security. So that’s when I turned into my two co-founders and I told them, “You remember my idea from two, four years ago? I think that’s the right time to take it to market.”
Andrew: And so you started. You mentioned raising money. At this point you hadn’t raised money yet, right?
Gil: At this point we haven’t raised money. But we said, “Okay, what are we going to do? Do we keep our day jobs and develop the product at night until we got the product and then start selling it?” We needed much experience of course. Do we raise money? But how do you raise money? The entire venture capital industry in Israel, we didn’t really know it and it wasn’t really existent. So we did a lot of brainstorming. Then we got to some good conclusion. First, we said we need to focus on the new idea with all our energy. The market is moving very fast, this internet is moving fast. We can’t develop it at night and wait until we got the product right. We have to run fast.
In order to do that we said we do need some funding. And, again, just to put things in perspective, we run the product on the Unix machine on Sun computers. These computers used to cost $10,000 each. So just to get computers, we needed to get like $20,000, which is an amount of money which we didn’t have. And so, I mean, we didn’t think that we need a lot of money, we just felt that we need the basic. So the conclusion that we had was that we need to find a way to raise money, something like $100,000. So we can start flying to the U,S and market the product, get our computers and do some more basic things like that. And we started looking. And two, three months later we raised the $250,000.
Gil: From BRM, which back then was a software company. They actually developed one of the first antiviruses of the world. And they OEM it to some American companies, eventually to Symantec. But it was after a few steps on the way. They weren’t a VC at the time. They became later. They got [for it 00:20:42] about half of Check Point.
Andrew: Well, half a Check Point for $200,000 just to give people a sense of what the world was like back then?
Gil: Yep. And that by the way, was their best investment, probably one of the best investment ever because these $250,000 three years later were worth $250 million. A year later, it was half a billion. And the year 2000, it was worth about $10 billion.
Andrew: And to give people a sense, you have not lost control of the company or at least you still have over 15% of the business today, you personally?
Gil: Yeah, I pretty much have the same percent that they had on day one because we actually never raised the money beyond that point. We completed our business plan and turned profitable after about $100,000 out of this [250 00:21:39].
Andrew: Wow. All right, I want to find out how you got your first customers. First, I’m going to tell everyone about a company called ActiveCampaign. Gil, you probably are aware of this. This is how the world should work. This is how it works for smart companies. When you come onto my website, I can tell what you’re looking at. I can tell what videos you’re into. So, for example, somebody who might come on to my website, if they’re looking at your video and then they’re looking at two other Israeli founders, I might know that they’re into Israeli entrepreneurs, right? And so I could just tag them based on what they’re doing and then fire off email messages to them saying, “Hey, I happen to have a fourth Israeli entrepreneur.”
And by the way, if you sign up to my membership, then you’re going to get access to these other three Israeli entrepreneurs who are teaching courses, only aimed at people who are premium members. That’s the type of stuff that every website should do. Most businesses don’t do it, Gil, because they’re not as smart as you. They don’t know how to figure out the software involved in marketing automation. And so ActiveCampaign, a company that’s been around forever said, “You know what? We’re going to make it super simple.” They now make it easy. Anyone can do it and anyone can get the results. And they guarantee it. I don’t think you need this.
But if anyone out there is listening to me and they’re looking for email automation that’s easy to use, that they will actually implement, I want you to go over to activecampaign.com/mixergy. They will let you use their software for free. Your second month will be absolutely free. They’re going to give you two free consultations with their experts. And if you’re with a different email marketing company where you don’t have these features, they will migrate you over for free. All you have to do is go to that URL. It’s activecampaign.com/mixergy. How did you get your first customers, Gil?
Gil: So getting the first customer was a big challenge. And my belief was that I shouldn’t look at the Israeli market when I knew the people and so on. Because in the tech market, people follow the America, the U.S. So I need to find some real American customers. And if I find them, the rest of the world will follow. So I was starting looking and the finding people in the U.S. to look for the software. It took us a while and we found a few guys that helped us get to customers. By three, four months later, we had about 10 beta sites, not customers yet, but we’re running our products in the U.S. And nine out of there, I mean, we actually had about 20, 10 in Israel, 10 in the U.S.
Nineteen out of the 20 that they liked the product and they wanted to buy it. One told us by the way that we like the product, but we don’t think that connecting to the internet is safe enough so they will wait. It turned out a year later they bought 10 copies. But we all know that you can’t be in our world without connecting to the internet. But the real challenge started about three four months later when my co-founders came to me and said, “Gil, you see we’re . . . ” well, April of 1994. “We’re here for about a year. We built a product that get good feedback from these 20 beta sites.” The internet in ’94, not many people knew about the internet, but we saw how fast it was growing.
But how do we sell? How do we three guys, we were still three people at the company, three guys that sit in Tel Aviv, how do we vey their businesses into sales? And basically what they said they sent me to the U.S. And they said, “Your goal is very simple. You don’t come back without the million dollar in sales.” I was trying to map the market see who can help us sell . . . finding resellers actually in the U.S. market. And that was my task for the next 10 days. Through that time I had a lot of story turns out with these 10 days didn’t last 10 days, we lasted about 100 days. But I came back three months later with a million dollar and basically establishing our first few customers and mainly signing up some real good contracts with distributors in the U.S.
Andrew: The product was Firewall-1, Check Point FireWall-1. And it did what?
Gil: So the product basically allows every company to define their security policy. What communication can go out, like people can surf the web, go to send email, whatever. Everybody thinks people what allowed to do. And what should also come in. Like external computers should have external entities can have access to your mail server through the SMPT protocol for sending you email or can have access to the HTTP protocol to your web server. And that’s kind of simple. What I described now is what we call a security policy. And that sounds trivial today, but it wasn’t revealed back then. And even today companies have these kind of thousands of security rules about who can communicate with who. Your business partners, your branch offices, different application which connects to one another. So it turns out with model of what we call a policy or a rule based turned out to be very powerful.
Andrew: I’m looking at your website from 1997. So, again, you were founded in 1993, a year before Amazon. 1997 . . .
Gil: Even before the web was invented.
Andrew: Before the web. Yeah.
Gil: The web browser came to market in ’94 a year later.
Andrew: And so by ’97, you guys put out a press release saying, “We now have 44% of the worldwide market share for firewall.” And it’s because you went out there and you sold a million dollars within 100 days to whom? What was your sales process?
Gil: The first process was to do a simple demo. We came to a customer. I had the presentation. By the way, presentation back then wasn’t PowerPoint, was in the form that you would you put on a projector?
Andrew: Literally, they would have a projector and you would put those little slides on there? Oh, no, no the sheets of paper that were transparent.
Gil: The sheet, yeah, the transparent sheet of papers. It would show them the concept. And I would like people to say, “We like the idea. Can you show us a demo?” And then I said, “Sure. Here is the diskette. Put it in your . . . ” it was a Sun computer usually. And tell you how to install it. And my challenge was that it will take less than 10 minutes to get the system up and running, working completely. And by the way, back when people let me put on our firewall on their gateway to the internet in 10 minutes. And usually when we would keep . . .
Andrew: I’m surprised that they would let you just go in and install something on their computers. A guy who, like you said, you were an Israel far away, 17-hour flight, the easiest if you got a direct flight to get over. That’s just the way the world worked. They said, “Sure. Come on in.” Why did they trust you?
Gil: It’s a good question. I mean, first, I think I . . . well, hopefully I’m showing like a trustworthy look. No. But, I mean, with the demo, even today we download demo software and try it out. I mean, today when people change their internet configuration, the entire business depends on that. Keep in mind, for most of these businesses, the internet back then was something quite experimental. And the concerns that their internal link is wide open was a huge concern. Think about that. Everybody can access your server, turn out your works, fill your data, change everything. And it’s very simple. So the fact that we actually had somebody that gives them a security solution was a pretty big thing.
Andrew: You went public soon after launching. How long did it take you?
Gil: We started the company in ’93. Launched the product in ’94 and we went public in ’96. So less than three years after we started the company.
Andrew: On NASDAQ?
Gil: On NASDAQ. Yes.
Andrew: The more American you could be in the beginning, the more credibility you have with the world. Is that right?
Gil: Absolutely. I mean, I didn’t want to go public, but my shareholders really wanted that. So they kind of forced me.
Andrew: Who were your shareholders who pushed you to go public?
Gil: They were first the BRM that made the first investment and when they sold some of their shares. They had 50% in the company. They sold 20% of the company to two American VCs, the excellent VC is still on my board. Venrock and USVP, U.S. Venture Partners. And actually the two partners that invested back then are still on my board.
Andrew: So I’m wondering why you were the one to sell. I’m looking at Shlomo Kramer’s info about him. He’s the guy who has a kid while you were coding. Yes, he was into computers for sure. But he was selling games, he was selling stuff. Why were you the one to go out and sell?
Gil: Firstly, I think we all got engaged with it. When all were involved and actually I started doing the first deal, then actually my partner, Marius, turned to be our virtual sales and marketing organization, literally living out of his suitcase. And he spent like two years traveling in the U.S. doing all the field work, meeting with partners, meeting with customers, fixing issues in the product, doing sales, marketing, everything. Shlomo turned into the head of our business development and sales in Europe and the rest of the world.
And then actually, they flipped. Shlomo moved to the U.S. for a couple of years to support our people . . . back then we already had employees in the U.S., to support our employees in the U.S. And Marius became the head of international sales and marketing. And, literally, the three of us did everything. We programed the product, we did sales and marketing. We did all the administrative stuff. We gave support to customers. It took us a time until we got employees. And when we got the employees, we were already involved in everything.
Andrew: All right. I want to go into how you got employees. But it’s kind of interesting that as I’m going in the history of your website, first of all, it looked for a moment there like it was a GeoCities site with like a brick wall on the website as the background and so on. But what was interesting was at some point, you guys decided we’re going to do seminars and symposiums. The more we can go around the world to New York, or at least the around the U.S. to New York, Dallas, San Francisco and do seminars and teach people about security, the more we can sell our product. That seemed like a big part of your marketing in the beginning.
Gil: Absolutely. By the way, still is and let’s remember, today, you can do webcast, and you can do a lot of things online, all of that didn’t exist in the ’90s but from the 2000. And even today, if you still think about it, most of us, most of the studies that we do is still done in the classroom, it’s still done when people take gain our attention and put us in a room when we concentrate on an idea and when we look at the person in the eyes. So still today, we’ll do a lot of these seminars even though today some of it has shifted into the online web and like listening to a podcast became a great thing. But, again, none of that existed in the ’90s.
Andrew: So you mentioned going hiring people. One of the things that I read in that Forbes article about you, you were on the cover of Forbes, right?
Andrew: Was that impressive for you, by the way? Did you care?
Gil: That was maybe the most impressive cover that I ever got because Forbes is such a huge magazine. And I went on there like most sold issue of the year. So that was big. But for me it was a very like . . . again, I felt it nobody else does because nobody . . . I mean, from the people who live around me in Tel Aviv, nobody is reading Forbes, but I felt it was a great recognition and good.
Andrew: Yeah. It’s the most read because that’s their list of the billionaires around the world, right? And so that’s the one that everyone takes, saves. As a kid, I used to take it and save it and go through everyone. It’s so interesting what kind of companies people would make. The one that was most fascinating to me was there was a guy I forget his name but he was in the scrap metal business. And I said, “Wow, scrap metal business and he’s one of the richest people in the country. It really is just so diverse.”
So I wanted to ask you a little bit about how in that article you said, “What we could do as an Israeli company is have offices around the world and tell them what to do. Or what we could do is” . . . well, you had a bunch of different options. You said, “Instead, what we’re going to do is have offices around the world, they lead and we are there to . . . ” to do what? What’s the structure that you came up with and how did you come up with that?
Gil: I think the structure that we came was to be what I used to call a global company. I don’t think that as Israelis we can teach the world everything. We don’t know all the answers. And if you look at the American companies, for example, you establish some structure and then you say let’s imitate that all around the world. No, it doesn’t always work but at least you have one huge market and that’s U.S. The first big enough that if you’re a successful there, you can be successful.
And second, the entire world looks up to it. Coming from Israel, I didn’t expect that to happen. I mean, I needed to learn in every country, the local practices, how you do business, how you interact with your customers, with your distributors, with your partners. And, for me, it says if I’m trying to do everything based on me being, you know, Israeli and know the right answers, I probably won’t get the maximum potential of it. So I came with some humility that says I need to learn from everyone. And I also don’t want to think that people all over the world will feel that they were working for an Israeli company. They should feel with me work for a global technology company. And that’s the structure that I try to create.
Andrew: How did you learn how to manage? How did you learn how to hire? Where did you learn that part of the business?
Gil: So I think I learned almost everything as I was coming out of my job. I mean, when I made the first . . . so, you know, hiring programmers wasn’t that difficult. I managed some small teams. I knew how to do that.
Andrew: Since you were a kid, basically, since you were a teenager, you were managing small teams.
Gil: Yeah. I’ve been involved. I’ve seen that. Hiring the first sales and marketing person we had in the U.S. was a huge challenge. How do you find that person? How do you work with them? It was completely new experience for me. I was referred to some headhunting firm. I don’t think it exists anymore in New York. And they did a terrific job in lining up the candidates, explaining to me the process. I literally worked with them for like three months, when we spoke almost every hour about the next step and what should we do. And when hired my first employee in America, a woman named Deb [Rieman 00:37:05], she was VP marketing in Adobe and became the head of Check Point sales and marketing.
I just decided that what I need to do is spend as much time with her as possible. I mean, we have no common background, never worked for the same type of organization. So we practically spent probably at least half if not two thirds of our time together. She would come to Israel a week every month. I would spend almost two weeks in the U.S. at that time. And we work together until we published that trust work relationship that we know what we’re doing.
Andrew: Did you have any mentors? Did you have anyone who was guiding you? I don’t see any of that as I read up about you. It feels like there was someone who was helping you, that you do draw good people to you. But who’s the person who brought the best out of you?
Gil: I’m learning every day and I used to learn a lot more, I still do from everybody that’s around me and from reading and from everything in the world. But unfortunately, I didn’t have a single mentor that they can say that’s the person I was looking up to. Part of it was because we started in an industry that didn’t exist. Part of it because we started in Israel with even though we had a lot of technology back then, didn’t have a lot of a successful global companies. And I think what we did is every problem that we were challenged, we learned not just me, me and my two partners, Marius and Shlomo. And we really analyzed every situation, thought it through, spent a lot of time analyzing the details and then forming our plan.
Andrew: But there’s not that one person who’s there to coach you, who’s there to mentor you, who’s there helping you figure this stuff out? It’s you.
Gil: No. It’s not one person. Again, we got a lot good advice. I can say we got this advice from this person. We got some nice advice from that person. But when I was young, I was very stubborn. So it wasn’t just giving me an idea I’m sure. Let’s say every idea I was given I was challenging. I was thinking it through. I was fighting it. And then I formed my own plan that I got some really good ideas at the early days.
Andrew: I feel like we’re talking only about the successes. What’s the big challenge? What’s the one that almost broke you or that made you doubt yourself? Did you ever have that or was it super easy?
Gil: It wasn’t super easy. I worked really, really hard. If there wasn’t something that almost broke me simply because even though we worked hard and we were challenged, at the end we were successful. So there wasn’t something that they should have broken us. But in the early days, I was challenged with new things that were completely new to me on a weekly basis. And then I just learned that to overcome these challenges.
Andrew: What’s biggest one?
Gil: I don’t think it was one big one. But for example, I mentioned the first week with my partners sent me to the U.S. to bring the million dollar. I met the market. I sent few emails. I scheduled like a half a dozen meetings. One of the first meeting was actually with an internet service provider in New Jersey, [inaudible 00:40:21] from Princeton University. And they told me, “You know, we don’t know if your product is good or not. It’s definitely sounds interesting. Next week there’s a big tradeshow in Las Vegas,” NetWorld+Interop, back when physical tradeshows were really big. “Why don’t you come show the product in our booth, and we see if customers are interested.”
And that was I think the most intensive week of my life because they said . . . first I called my partners. By that time it wasn’t for me 11:00 p.m. at night or later. I spent almost half the night discussing with them if we should participate in that tradeshow or not because the challenge of setting up something in a week seems like a big challenge. And that week, I’ve learned so much from the fact that the U.S. customer won’t call our Israeli number that was on our brochure. So we had to establish a virtual office and answering service with an address with 1-800 number so people can answer the phone. I had to learn how to do that.
And back when it was opening the Yellow Pages, the physical Yellow Pages, looking through the list, calling 20 agencies like that, getting the offers from them until I found the right one, through printing stickers that we can stick on the back of our brochures to putting signage, renting a computer. We wanted to demo the product so we needed to rent computers, big Sun computers. I found an agency that they rent them. I called them. They have them available. I said, “Okay, so what’s your credit record?” They have no clue what’s a credit record, for example. And then we needed to figure every single item in the logistics. And interestingly enough, 10 days later, when we were in that show, we won the NetWorld+Interop Best of Show award for the best new product. So that was like a very, very intensive 10 days for me, but I learned so much stuff.
Andrew: By the way, that phone number thing is still an issue. I was trying to contact somebody in the Israeli security space, someone who just worked for an Israeli security company and ask him a question about you. I couldn’t even get them on WhatsApp. It wasn’t until maybe a few minutes later, but it felt like a long time that I realized, “Oh, you you’ve got to get rid of the 05 and add the 792, I guess it is, the country code, whatever. And once I added that then I was able to reach them on WhatsApp. That issue is an issue and it seems so small. But when you’re in the U.S. you don’t think about it. When you leave the U.S., you’re communicating internationally, it’s an issue.
Gil: Americans don’t realize that because you got the entire world in domestic. In other parts of the world, by the way, it’s a non-issue. We call everywhere. And that’s, by the way, we figured that out that an American won’t call an international number so we need to have 1-800 number and we still have that number, 1-800-429-4391. Think about [inaudible 00:43:16].
Andrew: Let me talk about my second sponsor and then I want to get back in. And I want to ask you . . . I don’t get into politics but I do have a question about politics based on something you said. My second sponsor is a company called Toptal. Gil, I’ve got to tell you, one of my past guests is a guy who runs a tech company called Tatango. It’s kind of cool. I was riding my bike here through The Mission in San Francisco, I saw an ad for him. He went from being a small guy to now having ads all over San Francisco. Anyway, he had an issue where he and CTO try to hire. They started putting ads out. They started getting a bunch of applications. Most of them were not good. It was taking a long time. It was distracting from their business.
And they finally said, “You know, Andrew is constant talking about Toptal. Let’s just try Toptal.” They went to Toptal. Toptal gave them two developers. No dozens and dozens of resumes, no hundreds of applications that make you feel good, but really waste your time. Two, the CTO talked to both those people. Said, “You know, we can hire either one of them.” They hired one that they felt was a good fit, but either one would have been fine. And then after the person started working with them, the CTO said, “You know, Derek, this guy could actually end up being our . . . This guy is as good as me. He could be your CTO.” It was that good. They kept on hiring from Toptal. If anyone out there, including you, Gil is looking to hire developers, you know how hard it is, Toptal has a different approach.
They have a database of developers that are already in their network. When you call them up, you tell them what you’re looking for. They go into their network, they connect you with two or three people who they think are going to be a good fit. You decide who you want. And if you’re not happy, you do not have to pay.
Here’s the deal, all you have to do is go to toptal.com/mixergy. When you do, you’re going to get 80 hours of Toptal developer credit when you pay for your first 80 hours in addition to a no risk period of up to two weeks. If at the end of the period, you’re not 100% satisfied, you will not be billed. Toptal.com/mixergy. And really, talk to Derek Johnson and so many other people who’ve hired, you’ll see they love them.
You mentioned, “People now work for us from everywhere.” And one of the things that you said was the first group of people on that list, this is just me operating from memory, was Israeli, Arabs. I’m wondering do you hire Arabs? How’s that working for you?
Andrew: We hire everyone that’s here. We do believe in openness. We do believe in equal opportunities to everyone. And in Check Point . . . Again, I don’t know how much you know about the Israeli society but when you walk to the Check Point dining room at lunch, it’s a perfect example of how everybody can work together and see that people from different backgrounds and different points of view around the world whether it’s ultra-Orthodox or Arabs, or any other part of the Israel society why high tech is such a great connector to people. They can all work together.
Andrew: Okay. That’s all I’ve got about politics. I suck at politics. Let’s talk about the future. Where do you see the company going?
Gil: First, I think the challenge interestingly enough after 26 years in that business, most businesses reach a point when they say, “We’ve covered our goal and now we need to find new frontiers.” Interestingly enough in cybersecurity the frontiers just keep expanding. We have more and more challenges. The problem that was important problem 26 years ago became a critical problem today. What was something about, you know, protecting your files against students in universities is now part of the future of economy or the future of, you know, country to country defense. And it’s a really lifeline of businesses. So, I mean, we have a lot of work to do now protecting both the networks, the mobile, the cloud, even IoT, which are becoming the next generation. And we need to protect the entire environment to make sure that we can connect one another securely.
Andrew: Right now from what I see, the majority of the revenue comes from sales of integrated appliances and security products. Security products meaning software or is it largely like devices that you’re selling?
Gil: Most of what we sell is software, but we sell the software today mostly integrated on what we call appliances, which includes the software and the hardware. Our market shifted from buying purely the software and installing it on open servers to one full like a ruggedize, a high quality appliance when everything is integrated, the hardware and the software. And because, by the way, it’s a mission critical device that runs all the network traffic for, you know, the most dependable networks in the world. Banks, ecommerce companies, everyone are relying on these devices to run all the traffic for them.
Andrew: And you mentioned Internet of Things. I saw that that was becoming a bigger part of your future. What are you doing there?
Gil: I think part of the challenges is, you know, when you protect the network, we know how to do it. When you go to the individual computers, you can install security software on them to make them even more secure. What do you do with these small IoT devices that are not smart enough to have their own security, but you can’t install software or how do you defend them? That’s one of the challenges we’re trying to face right now. How to protect? There are multiple ways from monitoring the traffic. So, for example, if you’re on the personal computer and you surf the network, it’s a valid behavior.
If you’re in MRI machine in the hospital and suddenly you access the internet, maybe it means that you’ve been hacked because of MRI machine shouldn’t access the internet. Or if you’re a controller in the power station and you suddenly start communicating with other entities, that might show the wrong behavior. So we are developing these profiles of what’s the right behavior of each device. And if something goes out of that right behavior, we can block it right away and make sure the attackers don’t take advantage of your IoT devices.
Andrew: What do you think of Warren Buffett and Bill Gates Giving Pledge where they’re trying to get billionaires to commit to giving the majority of their wealth away?
Gil: I think that’s a very nice move on their side. I think it’s a great initiative. I mean, like make sure you get more time one day that I can dedicate more of my time to that.
Andrew: But you’re not a part of that? Have you thought . . . ?
Gil: I’m not part of that specifically. I’m part of few others not too many other initiatives in Israel and the society here.
Andrew: That’s your charitable contribution. Is there something you’re especially passionate about that way?
Gil: The two projects that I’m personally involved with and I’m passionate about are both about education and varying the two extremes. The bigger one is actually helping kids with are practically dropouts from school that everybody gave up hope about them. And people think that they can really graduate from school, go to college and become, you know, citizens that can contribute to society. And actually, there is an organization that takes care of them. And have amazing results that they’ve never seen such results, but take these kids where nobody believes them. And 94%, 97% of them not only finished high school, but finished high school in a way that can get to college. And that changes their entire life perception. It’s not just a matter of grades, it’s believing in yourself. That’s one organization.
And another one is the opposite side of education. That’s called Tel Aviv Youth University. We are enabling talented kids to go and study in the university while they’re still in high school. And they basically maximize their potential. Actually, by the way, I think that we are in the top of our capabilities. We’re in the teenagers 15, 16. When you think about that, where mental capacity at its max. We don’t have any obligations. If we like something we can do . . .
Andrew: At 15, 16 our mental capacity is at its maximum. Most people think the opposite that that’s where kids are stupid. I tend to agree with you. I think there’s a lot of intelligence that’s not being appreciated and not being used. And so they end up going to stupid stuff.
Gil: I think so too. And, by the way, remember that that stage, if you like something, you can do it full time. You don’t need to support yourself, you don’t need to make money, you don’t need to raise a family.
Andrew: You can obsess on it.
Gil: You don’t even need to do your laundry or prepare your food. Somebody does it’s for you. See, if you like something and it doesn’t matter if it’s football or science or girls, you can do it at the maximum. And I think that organization, Tel Aviv Youth University maximizes that potential. And it’s unbelievable what comes out of these kids. These are good kids. But instead of being, you know, especially in the Israeli society, when you go to the army and by the time you’re thinking about how to excel in your career or in your academic studies, you’re already ready, 25, 26 and there, and now you need to think about how to start supporting yourself and raise a family. If you do it at the age of 16 instead, it creates huge stars with everybody benefits from and we believe these people will be leaders, what we call the leaders of tomorrow, especially in the field of entrepreneurship and science, and so on.
Andrew: Because you give them an opportunity to do something with the intelligence and the focus that they have me. Let me close out with this. My goal here is to understand you and the other guests who are coming on so that we can all learn from you. Like what would you leave us with? If we wanted to be more like Gil, if we wanted to bring more out of ourselves into the world, tap more into the other 70% that you said most of us don’t tap into? What can we do?
Gil: I think beyond working hard, which is always good, I think it’s always looking at the two sides of every story. Whether it’s . . . For example, you need to be very, very passionate about something and believe in it. On the other hand, you need to challenge yourself with what are the facts and the data. And if you can get these two to correlate, if you’re passionate about something and the data supports it, then it’s worth doing. And, you know, if the data looks good but you’re not passionate, it’s not likely that you will be able. And by the way that’s true for every decision. So if you find the one thing that you’re really passionate about it and you challenge yourself with the other side of the brain, which brings you all the analytics and the data. And you can really find the idea when both of these things come together then you can find something that can really make some difference.
Andrew: So have a direction you’re super passionate about but constantly challenge it and make sure that the data is supporting it?
Andrew: All right. Good place to leave it. Thanks so much for being on here. For anyone who wants to check out your website, you’ve had checkpoint.com since basically the web existed. You’ve had that site. Look at this. The first version was the first thing that I see, 1996. I guess you got your website from [Ubix Place 00:55:11] on the web.
Gil: We got in ’93.
Andrew: In ’93. I don’t I don’t see it in the Internet Archive. Maybe you got it before the Internet Archive started archiving it. But it’s interesting to have gone through the history of your company as the website evolved. All right, it’s at checkpoint.com. I want to thank the two sponsors who made this interview happen. The first will help you hire phenomenal developers. It’s called Toptal. Check them out at toptal.com/mixergy. And the second will do email marketing right, it’s called ActiveCampaign. Go to them at activecampaign.com/mixergy. Gil, it’s an honor to have you on here. Thank you.
Gil: Thank you very much. You’ve been a great host, a great interviewer. Really interesting.
Andrew: Thank you. All right. Bye.
Andrew: Bye, everyone.