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5 Success Secrets of This Pink Panther Inspired Billionaire


5 Success Secrets of This Pink Panther Inspired Billionaire

If you have not watched any Pink Panther movies, you are missing an important part of the world's cultural heritage.

Those movies featured a bumbling detective, Inspector Clouseau, and his incompetent assistant Cato Fong -- famous for his futile and ineffective attacks.

In case you missed it, here is a link to one of them.

InJanuary 2015. Shlomo Kramer, a serial Israeli IT security entrepreneur , started a cloud security company -- Cato Networks -- namedas"a play on the futility of ineffective attacks."

I am not aware of anyone who has been more successful founding and creating shareholder value from such companies.

Starting his career in the Israeli Army's elite 8200 information security corps, he's helped found a string of publicly traded information security companies with a total market capitalization of $26.6 billion.

And this does not include the value of the companies he has started and sold to other companies.

Add those up and you get a net worth I estimate at around $1.1 billion.

In October 2015, he announced that he had received a hefty Series A investment in a network security startup, Cato Networks, of which he is CEO. Kramer co-founded Cato with Gur Shatz -- a networking expert and the founder of Incapsula an anti-distributed disruption of service (DDos)protectionservice in which Kramer had invested.

How does Kramer do it? Here are five principles he follows and how he applied them for Cato.

1. Target large markets

If you are going to take the risk of starting a company, it helps to go after large markets. The best you can hope for is to get 10% of the revenues of that market.

If you want a company with at least $100 million in revenues, the markets better be large.

Cato develops products for two markets valued at $72 billion. As he explained last month, "The opportunity is to converge the Wide Area Networking (WAN) and networking security markets into a single Cloud platform to transformtwo huge markets: WAN spending of about $60 billionannually on multiprotocol label switching (MPLS) and $12 billionannually on Network Security (Firewalls and Unified Threat Management systems (UTMs)).

2. Exploit competitors' weaknesses

Big companies are not eager to give up their customers. A startup has far fewer resources so the only way it can takeshare from incumbents is to give their customers an offer that they can't refuse -- by which I mean more performance at a much lower price.

Cato believes that its competitors want to sell boxes but customers prefer to rent access to them via the cloud. "Cloud goes against the interest of the incumbents as a lot of their revenue and their channels revenue come from boxes (purchase, install, upgrades, end of life replacements). It is, however, in the best interest of their customers. This is the opportunity."

Though Cato does not have revenues, it launched in February 2016 and is taking customers from Kramer's old company -- CheckPoint. "We have quite a few pilots and a few production customers with one global deployment of a manufacturing company with 36 locations. In that account we are in a process of displacing Checkpoint with Cato Cloud."

3. Tap the strengths of your ecosystem

You should also look around you and see what resources are available to help you build a world class company.

For Kramer, that surplus resource was Israeli cybersecurity talent. As Kramer explained,"As a nation, our primary natural resource is highly skilled people trained in various technical fields during a military service."

Cato is an example of this. "Our founders are serial entrepreneurs in the field of cybersecurity, with their intro introduction tothe space occurring during their military service. They have a unique perspective and experience needed to lead new ventures and attract the kind of technical skills that are now available in Israel."

4. Build the best team

If you are going after a big market, you will likely face competitors.Winning comes down to hiring and motivating the best people.

This is certainly true for cybersecurity."Competition for these resources is tough, so you have to put together the right team and vision to get people excited about what you do,"Kramer said.

And the founders' social networks help Cato win the battle for the best team. As Kramer explained,"The vast majority of our team members are coming through internal references. Israeli high tech community is pretty close. As success breeds success, it becomes easier for successful leaders and founders to partner with past team members."

Cato has applied these principles."Many of our executives and team members followedme and Gur fromour past companies and investments (Imperva, Checkpoint, Trusteer, Incapsula). The reputation of the founders further extends beyond this core group, to drive others to join," he said.

5. Recognize and overcome your weaknesses

In all likelihood, your company has some weaknesses -- which it's best for you to accept and take action to overcome.

In the case of Cato and other Israeli tech startups, the problem is small local markets.

To buildsuch startups into large companies, the founders must sell all over the world. As Kramer explained,"Israel has all the elements needed to build great cybersecurity companies, but the markets for them are always global. This often leads to a corporate structure that emphasizes Israel as the home for R&D and a sales organization that is distributed in key markets, the biggest one is often the US."

You may never become a billionaire but these five tips can help your business grow.

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