In this next portion of the interview, Philippe discusses the Signio acquisition by Verisign.
SM: Tell us what happened with Verisign. PC: Well, once inside Verisign, we were also looking at buying a very small company that was doing something very similar to PayPal, but VeriSign was not that keen on that marketplace which was not a very good decision I think.
But they did a very good job with Signio, and grew the business. Signio was sold to EBay recently, and so EBay is now the traditional gateway for credit card payments with the Signio platform. They were processing 30% of the transactions on the Internet, and that is something that I am very proud of. I have always taken these small companies and made them into larger companies with a lot of market momentum.
SM: How much did you sell Signio to Verisign for? PC: I think the original transaction was $700 million, and then the stock went up, so it was, in the end, about 1.4 Billion. We could not continue not selling to Verisign, it just did not make financial sense.
SM: So another vacation coming up?PC: Then I went to Belize, and I was caught in a hurricane for a week, which was a fantastic experience. When I came back, I asked myself what was I going to do next. That was the 1999-2000 timeframe. I looked again and I had options. One was to go back to the internet and do something for the consumer. The other was to see how the internet would affect the enterprise business.
I am a firm believer that the enterprise is dead. People tell me to look at all the laptop computers, iPhones. But I think they are missing the point, these do not apply to the enterprise. We are now in the notion of the extended enterprise. The enterprise is completely fragmented. You outsource everything today; your servers, people, resources, and some people even outsource their R&D and just become a distribution company.
Then somebody came to me with an idea, and said, “you know today there is all these different network systems, an automated scanner could do the audits and then on a laptop do a report. We could automate that scanning and deliver it as a service.” So I said this is one of the big applications of the future, and I gave him $500,000 and we started the project.
SM: You mean scanning for Security problems? PC: Yes. And while I was doing that, I started to look at the market. All the big companies, the McAfees and IBMs, were all looking at scanning the network. It was difficult, mechanical, and they did not have anything good to do it the scan reports. So, what I brought one VC to fund the company further, and one year later we were really in the doldrums, 2001, when everyone was negative about anything whatsoever to do with the enterprise.
SM: Yes, the enterprise market crash was in full bloom.PC: I did not give or want any more money to go back into enterprise software. I was not interested in it because I thought it was completely dead. But, nonetheless, they didn’t get what I was actually trying to do, which was NOT enterprise software.
SM: What were you trying to do?
PC: The VC did not support me, so I went with Don Dixon at Trident Capital, a new VC, and told him we could create an Internet delivery platform which would allow us to scan any network on the planet no matter how big or small, and that would give us a unique opportunity to go after other things. I can’t tell you yet what they are, but we can do them for sure.
SM: You are kidding! That is about the vaguest VC pitch … did Don Dixon fall for it?