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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
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

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
slide12

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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