`Being an investor is not really work'
Shlomo Kramer is only 38 but could have retired long ago, and not only because his personal worth is more $400 million. Kramer, along with his friends Gil Shwed and Marius Nacht, will always be remembered as pioneers in the world of technology - they invented the firewall that protects most computers from invasion via the network.
The three made history when they founded Check Point in 1993 and turned it from an unknown startup into a major power in information security, now worth $6.2 billion. Kramer, who was 26 back then, became another wunderkind of Israeli technology, and one of the country's richest individuals. But he is not ready to rest on his laurels.
Nowadays, Kramer is sweating away at his new startup, Imperva, as if he was a young entrepreneur just starting out. Besides the long hours he spends at Imperva's Ramat Gan office, Kramer is a favorite of the airlines, flying to, from and around the United States for about two weeks a month, meeting with clients, marketing and persuading and giving up weekends with his growing family. He has no intentions of losing out in the stiff competition between startups.
"Yes, I have gone back to being an entrepreneur," said Kramer in an exclusive interview with Haaretz. "There are not many serial entrepreneurs in Israel, but I consider myself one of them. Even before Check Point I was among the founders of Algotec, which was later bought by Kodak [for $42.5 million - G.Y.], I was involved in startups through the Hebrew University in Jerusalem, so it is natural for me to go back to being an entrepreneur. I love the idea of building a company - creating something from nothing."
Kramer has shyed away from public exposure over the years. The tremendous success of Imperva has helped him to change. Unlike many other Israeli high-tech millionaires, Kramer does not belong to the jet-set scene and does not lead a glitzy life. Imperva's offices near the diamond exchange in Ramat Gan are quite modest and Kramer's own office is a small, simply furnished room without a spectacular view, fancy chairs or executive toys. He dressed for this interview in the best American tradition, wearing a white shirt monogrammed with the company's name. Kramer's youthful looks are deceiving, concealing his decisiveness and highly-honed business sense.
Unlike his colleagues Shwed and Nacht, Kramer has sold as many of his Check Point shares as possible over the years. He currently owns an estimated 5.5 percent of the company, worth some $340 million. Kramer withdrew from active involvement in Check Point's operations a few years ago, and retired from the company's board last year. He invested some of the proceeds from his shares in various startups, including Business Layers, which was sold to Netegrity for $44 million and Maximal Innovative Intelligence, which Microsoft acquired for $20 million, SupplyScience, and in companies such as ForeScout and Digital Fuel.
"That was during the period between Check Point and Imperva," says Kramer, "when I was working at a slightly slower pace. I sat on a few boards, invested in a few companies, but I discovered that being an investor is a lot less interesting than building your own company. Being an investor is not really work. I need the intensity of building something new."
Kramer is not really interested in anything besides information security.
"It's what I love to do," he said. "I have expertise and experience in this field, and it interests me. Apart from which, working in this field is a bit like `Alice in Wonderland' - You have to run very fast just to stay in the same place. The more sophisticated information security products become, the smarter the hackers and the more dangerous the breaches are. Plus, the hackers are no longer children playing with their computers. There is real organized crime out there, bent on breaking into computers, so this field only gets more interesting, fascinating and challenging."
Two white hackers
Intensity is the key for Kramer. It is why he left all the boards of directors on which he was active, and why he is investing all his energies in Imperva, which he founded in early 2002, at first under the name WebCohort. He founded the company together with Mickey Boodaei and Amichai Shulman, two "white hackers" - hackers who use their abilities for good - who gained their experience in secret units in the Israel Defense Forces and had their own information security consulting firm, Edvice, until Kramer met them.
"At that time I was on the board of ForeScout," Kramer said, "and was wondering about the next stage in information security, the next layer of protection after the firewall, which began 12 years ago, and the second stage, intrusion prevention systems, which were developed four years ago. The new protection layer entails going beyond the firewall to protect an organization's applications and database centers."
This is a very real problem. When organizations use Internet applications such as Internet banking, hackers can access an organization's database via the applications and change workers' wages or students' grades, steal client information, credit card numbers and other business information. When hostile applications infiltrate an organization's network they appear like innocent client requests for information, so the traditional firewalls approve them.
Imperva already has revenues amounting to a few million dollars, but no names of big clients have been disclosed. The company has been included in The Yankee Group's list of promising startups in its field.
"Imperva takes a holistic view of application security in protecting internal and external access to Web interfaces, application servers and database servers," the group's report reads.
When Imperva started to raise capital, it received backing from American funds that had invested in Check Point 10 years ago, such as US Venture Partners and Venrock Associations. Accel Partners, another American VC fund, also came on board, contributing to the $17 million that Imperva has raised so far.
Imperva's competition includes Israeli startups KaVaDo, Sanctum (sold recently to Watchfire, an American company), Applicure and PineApp. Information security giants like Symantec, Sygate, Cisco, McAfee, Juniper and Check Point have begun taking an interest in this hot field, and have already developed their own products.
Kramer is not interested in living in America. For a number of years when he was at Check Point he lived in the U.S. with his family, but he returned to Israel long ago.
"I am not the emigrating type," said Kramer. "I wanted to live in Israel, to live and work among people whom I know and with whom I feel comfortable. I discovered that this is possible. Sometimes it is difficult because of all the flying, but I believe it is possible to build a successful company in Israel that is split between Israel and the U.S. That is why my startup is Israeli, but with headquarters in the U.S. I hope that other Israeli entrepreneurs will choose this option too. Yes, it is hard, but it is possible."