British Brothers: Scansafe Founders Roy and Eldar Tuvey (Part 2)

SM: How did you get the business started? Did you finance it with your own money?

RT: Eldar had been running a business for three and a half years, and I had come directly from a finance background. The entrepreneurial spirit runs in the family. Everyone in the family has some sort of business. It was always what we were going to do. It came earlier than I thought it would for me, but the opportunity presented itself. The timing was right in the technology market, and I think you have to seize the opportunity when you can.

It was self-financed initially. We also did not have a technology background. The first challenge for us was to identify from a technical perspective whether or not the project was feasible. Through Eldar’s INSEAD network he was good friends with Phil Barrett, the CTO of LastMinute.com. That was the London poster child in the dot-com days; had a billion dollar float and actually made money.

Phil introduced us to John Edwards, who is now our CTO. He has been working with us for the past eight years. We thought he had a lot of smarts and we asked him to put together a feasibility study for this email marketing study.

We raised some angel financing very quickly from friends and family. Shortly after that we had a VC round.

SM: Where they British VCs?

RT: The fund was originally called Chase Episode, which was a partnership between Chase Capital and Episode One. It was the Internet-focused part of the general Chase Capital fund. It had a few hundred million dollars focused on Internet investment, and they had brought this internet investment management team in to run that part of the portfolio. Then Chase merged with JP Morgan so it became JP Morgan Capita,l and as a result that partnership was dissolved.

When it was Chase Capital they had a massive gain in the profit/loss, and the next year they had a massive $2 billion loss. Even Chase can’t take that kind of write-down. No money changed hands, it was just the devaluation of stock. They did that and one of the things they wanted to get out of of was Internet investments. There were all sorts of back and forths, but at the end of the day we took the opportunity and bought them out.

SM: You personally bought them out?

RT: Correct. We did that in December of 2001. We grew the company organically from there. A few things happened after that to get the concept of ScanSafe, which is when exciting things started to happen in 2003. We understood the web protocol through this joint venture. We had developed a content filtering solution for email that we realized was quite good. We were sitting around saying we had a good team and a great technology but we were not in the right market.

We then latched on to how the email SaaS providers had come out, and we subscribed to that model. We thought it was such a great thing that you could outsource all of your security. Why manage all of this yourself? We knew how to process web traffic, and that was the biggest new area of vulnerability for company networks. We forecast that a lot of virus activity would get focused on the web. That is how we came up with the business idea for ScanSafe.

This segment is part 2 in the series : British Brothers: Scansafe Founders Roy and Eldar Tuvey
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