Putting China On The Silicon Valley Map: NetScreen And Fortinet Founder Ken Xie (Part 2)

SM: How long did you stay with the PC company doing network installations?

KX: I was there for one year. I jumped around quite a bit, and sometimes I was working for multiple companies at a time. The second year I was in a grant program at Stanford. The electrical engineering program is very difficult and it is hard to get a lot of scholarships. It is hard to get into Stanford.

SM: Did you have a teaching assistant position?

KX: Later I did, but then I found out that I could make much more money doing consulting work on the side. Once I helped a company set up its network and Internet; that company would then call from time to time with some issue. I found that a better way was to have them pay me a monthly fee, and I gave them a pager. I had 20 to 30 companies that I supported, and they all gave me a monthly fee.

Instead of going to college right away I spent the first year doing that and working. I then started studying at Stanford and was doing consulting on and off for five to six years. My parents’ dream was for me to get a PhD. They felt that was much more prestigious than to just start a company and make money. For me, if I do not have my own company, then there was no need for a degree. I felt I was born to be an entrepreneur. After I did various companies, it was just too hard for me to go back to Stanford because I was having fun and experiencing success.

Fortinet was the third company. My first company set up a software firewall. Once the Internet connections were made, you had this software that would prevent a hacker from setting up a VPN. I started that company when I was 29 years old. Running that company let me connect with customers on a daily basis and see the issues that they had. Most security companies were software companies running on Microsoft or Linux.

What was interesting to me is that the firewall was also a network device, and it could have hundreds or thousands of computers behind it. Network companies such as Cisco and Juniper made dedicated hardware and a dedicated OS to make the firewall faster and more reliable. A firewall on the PC was just not that reliable. The OS of a PC was not designed for a networked environment. After a few years I realized that in order to make a better firewall that was faster and more reliable, I needed to use a dedicated chip and OS.

SM: So your company, Stanford Information Systems, was doing software firewalls. When was this?

KX: I started that in 1993. That company had some of my close classmates and friends in it. Most of us did it part time.

SM: Were you making money?

KX: We were making some money, but we all had other jobs and we went to school. It was a chance to learn a lot of things about business and technology. At that time there were not that many people who came over from China. There was not that much of a base here for me to leverage. Additionally, the notion of starting a company was new. I had to learn about structures and how to deal with customers.

SM: There is a lot of learning in your first company. I have done three companies since I was 24.

KX: Exactly. The first company was more like half product, half customer engineering. At the same time we had to learn how to sell, market, and position ourselves. I also had to learn how to form a team. Then we realized the potential we had. The founding team did not have the skills we needed to match in the next step.

SM: And your next step was a firewall with a dedicated chip and OS?

KX: Yes.

This segment is part 2 in the series : Putting China On The Silicon Valley Map: NetScreen And Fortinet Founder Ken Xie
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