A return to value building real businesses
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A Return to Value: Building Real Businesses. Gil Shwed, Chairman & CEO Presented by Marius Nacht, SVP. Agenda. Evolution of the IT Start-Up Goals Fundamentals Creating value The Check Point Case Market and technology growth Financial results Creating customer value.

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A return to value building real businesses

A Return to Value: Building Real Businesses

Gil Shwed, Chairman & CEO

Presented by

Marius Nacht, SVP


Agenda

Agenda

  • Evolution of the IT Start-Up

    • Goals

    • Fundamentals

    • Creating value

  • The Check Point Case

    • Market and technology growth

    • Financial results

    • Creating customer value


The tech start up the opportunity

The Tech Start-up:The Opportunity

  • Innovation and low cost of entry

    • Significant entrepreneurial opportunity

  • The Entrepreneur

    • Innovate & Make a difference

    • Be A Leader

    • Achieve Financial Success


How is this achieved

How Is This Achieved?

  • Customer Need

    • Products/Services that fills a real need

      • Customers are willing to pay for this

  • The Start-up Advantage

    • Focused & Creative

    • Expertise – Market & Technology

    • Fast & Flexible

Innovation


The start up s plan pre 1995

The Start-Up’s Plan: Pre-1995

  • Created an Innovative Product, Technology or Service

    • Lean (2-4 people) “garage operation”

    • Spent cautiously and operated on limited resources

  • Found the Early Adopters

    • Made “real world” products

    • Started selling!

  • Built a company

    • Grew sales first, then grew company

    • Evolved the technology just ahead of market


The start up s plan 1998 2000

The Start-Up’s Plan: 1998 - 2000

Identified a HUGE Opportunity (or jumped on a “hot” bandwagon)

  • Hoped for big money rewards

  • Challenge was to gain mindshare

Created Mindshare

  • Spent $$$ (before a real product)

  • Built a company that fit a HUGE opportunity

Focused on internal growth

  • Built a big company prior to proven market/product

RESULT: You’ve just lost your start-up advantages

  • Not as fast, focused or cost effective


What does the plan for a post 2001 start up look like

What does the Plan for a Post-2001 Start-Up Look Like?

A Pre-1995 Start Up Plan…


The start up s plan post 2001 a return to value

The Start-Up’s Plan: Pre-1995

The Start-Up’s Plan: Post-2001A Return to Value

  • Create an Innovative Product, Technology or Service

    • Lean (2-4 people) “garage operation”

    • Spend cautiously; operate on limited resources

  • Find the Early Adopters

    • Make “real world” products

    • Start selling!

  • Build a company

    • Grow sales first, then grow company

    • Evolve the technology just ahead of market

  • Created an Innovative Product, Technology or Service

    • Lean (2-4 people) “garage operation”

    • Spent cautiously; operate on limited resources

  • Found the Early Adopters

    • Made “real world” products

    • Started selling!

  • Built a company

    • Grew sales first, then grew company

    • Evolved the technology just ahead of market


A return to value focus efficiency

A Return to Value:Focus & Efficiency

  • Sales

  • Customers/Partners

  • Technology

Efficient – Invest in the right places


The check point case creating value

The Check Point Case:Creating Value


Check point case from start up to world class company

Check Point Case: From Start-Up to World Class Company

  • 1993 – 1994: Launching Company

    • The Israeli version of a “garage operation”:

      • Headquarters = Grandmother’s apartment

      • Staff = 3 Founders (3 Developers added towards end of 1994)

    • Undercover development

    • Guerilla Marketing

  • 1995 – 2001: Building a World-Class Company

    • Worldwide Operations – Sales & Services

    • From $10M to $0.5B Sales

    • Global Organization

      • 300 R&D, 300 Sales, 200 Services


A return to value building real businesses

1999

1997

1994

VPN

Firewalls

  • End-to-end Internet security platform

  • Desktop/Client security

  • eBusiness application security

Check Point Case:Setting Technology Standards

2001

  • Stateful Inspection

  • First shrink-wrapped firewall

  • Integrated

  • VPN/Firewall

  • OPSEC

  • Alliance

  • Gigabit Performance

  • VPN Enterprise Scalability

  • Security Dashboard


Creating value check point revenues profits

Net Income

Revenues

EPS

Creating Value:Check Point Revenues & Profits

$1.20

$

600

$

500

$0.80

$

400

Millions

$

300

$0.40

$

200

$

100

$0.00

$

1995

1996

1997

1998

1999

2000

12

Month


When starting try to find

When starting – try to find

  • “Exploding” Markets

    • Hard to predict

    • Enough for many

  • Partner

    • Can’t do it all (and well)

  • Innovation

    • Technology

    • Utilization

    • Marketing


Summary

Summary

  • “Economic Value” is back

    • Companies are measured on revenues and earnings

    • Grow only as much as you can afford / as much as is financially justified

  • “Start-up and Innovation” culture is back (“Get rich fast” might not work that well)


How is this achieved1

How Is This Achieved?

  • Customer Need

    • Products/Services that fills a real need

      • Customers are willing to pay for this

  • The Start-up Advantage

    • Focused & Creative

    • Expertise – Market & Technology

    • Fast & Flexible

Innovation


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