In this episode of Cybersecurity (Marketing) Unplugged, Bobi also discusses:
- An overview of different investment strategies;
- Specific areas of the cybersecurity industry that he’s currently most excited about;
- How he sees the role of artificial intelligence and machine learning in the future of cybersecurity;
- Advice he would give to entrepreneurs who are looking to build a cybersecurity startup and seek investment;
- And much more…
Bobi Gilburd is the Chief Innovation Officer at Team8. Having served in the IDF’s elite unit 8200 as a colonel for over 26 years, Bobi brings extensive cybersecurity knowledge and strategic acumen to his role at Team8. Leading the unit’s research and cloud divisions, Bobi developed an innate understanding to the myriad of attack vectors across the global cyber landscape. He was awarded the Idrael Defense Prize, the most prestigious award in Israel’s defense establishment, for his unique contribution to the field of cybersecurity. Bobi holds a Master of Public Administration from the Harvard Kennedy School and a Master of Science from Technion, Israel Institute of Technology.
This episode has been automatically transcribed by AI, please excuse any typos or grammatical errors.
Mike D’Agostino: [00:24]
Welcome back, everyone, to another episode of Cybersecurity Marketing Unplugged. Today we have a great interview and a great interviewee. Just to provide some context to this session, cybersecurity has become one of the sexiest industries to invest in. Momentum Cyber’s latest cybersecurity almanac references over 3,500 core cybersecurity vendors with nearly $120 billion dollars in M&A volume and nearly 20 billion in investments in 2022 alone. Unicorns abound and consistent investments despite economic uncertainty, cybersecurity should be considered a smoking hot market for investors. But there are a wide range of approaches when it comes to investing in cybersecurity companies. Some investment firms invest in cybersecurity companies not because they are in tune with the market, but because the market is identified as productive and attracting returns. Other investment firms have principals on staff that came from and have a deeper understanding of the cybersecurity industry, and thus could be considered insiders in the market. And yet, other investment firms take a bit of a different, more hands on approach to investing in cybersecurity companies. One such entity is the Israeli firm Team8. I think they might actually be opposed to me using the term investor to describe the firm, as they are not just investors, but rather company builders. To help us break down the business model, we’ve invited today’s guest, Bobi Gilbert of Team8, the firm’s chief innovation officer. He joined teammate after serving an IDF’s elite Unit 8200 for over 26 years, and Unit 8200 plays a large role in Team8’s approach, something we’ll get into throughout the conversation. Bobi, welcome to the series and great to have you join us. I just glanced over your background very quickly. Perhaps you can spend a minute or two and help fill in the gaps as far as how you got to join Team8 and what your main responsibility is with the firm.
Bobi Gilburd: [02:37]
Hello! It’s very nice for me to be here today. Last year, I ended my 26 years journey at the Israeli Defense Forces Unit 8200, which I joined when I was 18. It was a fantastic journey. As soon as they started the search for my next quest, Nadav Zafrir, who is a Team8’s, co-founder and managing partner, approached me and Nadav led the Unit 8200 from May 2005 to 2008. He was my commander back then, he suggested that instead of building only one company, I would create several successful companies together with Team8. This sounded too attractive to decline, and today I’m Team8’s chief innovation officer focused on company building, specifically on the ideation stage of our enterprise vehicle, meaning cybersecurity, data and AI companies. Ideation is the process of building the framework of thesis, research and problem validation for a new startup.
Mike D’Agostino: [03:46]
Just to sort of piggyback on that, when you and I first talked about this interview, I sensed right away that you were a bit opposed to referencing Team8 as a cybersecurity investment firm. Why so?
Bobi Gilburd: [04:00]
You have good sensors. When Team8 started in 2014, the company’s motto today was a rethink venture. The idea was to create an ecosystem where everyone wins, the founders, the investors and the VC itself. Team8 actually built the companies it invests in and giving us more control over the process, resulting in a dramatically higher success rate and return of investment. We are building the companies we invest in following a thorough process, the risky phase – the venture process. We first ensure that there is an actual market gap and the problem that requires a solution. Then we validate the proposed solution with the vast network of companies, which we call our village and then we leverage our experience in company building from the ground up. Today Team8 is building companies in three domains – cyber and data, fintech, and digital health. Since we have such unique access to founders in early stage companies, we also introduced an investment arm that operates in a more traditional VC model a few years ago. However, it is also different than regular VC because our VC companies enjoy access to Team8’s company building knowledge, unparalleled network and the entire Team8’s staff and leadership for their assistance.
Mike D’Agostino: [05:34]
Got it! Way more than just a monetary investment vehicle, but more so a company builder almost like an incubator to a certain degree. Very interesting. You educated me on the name Team8 where, as a marketer, I picked up right away on the play on words in relation to Team8 referring to someone who plays on the same team. But you also mentioned that the name alludes to Unit 8200. For all of our listeners, can you please describe what is Unit 8200? What does it have to do with the firm?
Bobi Gilburd: [06:07]
Unit 8200, which I until recently called home, is the Israeli equivalent to the NSA – the US National Security Agency. Unit 8200 is a unit in the Israeli Defense Forces. It consists mainly of young soldiers drafted due to the Israeli mandatory service. People serve at Unit 8200 from the age of 18, usually for four to six years. Some choose to stay longer, which becomes very profession. After finishing their service, these graduates’ alumni typically join the Israeli cyber startup ecosystem. The unit is an excellent hub for thinking outside of the box, for innovation, and it plays a crucial part in the Israeli industry, specifically the cyber industry. Nadav, Israel and Liran, founded Team8 back in 2014. They are all Unit 8200 alumni, and about half of the almost 100 company builders in Team8 today come from a Unit 8200, with similar statistics in our portfolio companies. It’s not only Team8, it’s also the portfolio companies that share a lot of Unit 8200 alums.
Mike D’Agostino: [07:32]
Sounds like a great network of insiders that you guys have formed to get the firm going. You just touched on it a couple of minutes ago, but you had described a pretty intense vetting process, with regards to identifying not just companies to invest in but rather product categories to invest in and build companies around. Can you provide any kind of overview on what that process looks like, and how you identify the most viable categories to invest in?
Bobi Gilburd: [08:05]
We would like to look ourselves as a startup. Our product is a machine, and this machine builds companies in a repeatable and efficient manner. It keeps improving due to our accumulated scale and experience. Team8 is strict about the machine and the process. We have formulated three milestones, and the first is a team only milestone where we validate the problem based on our interaction with the village of CISOs and other partners. We are usually looking for realistic problems where the CISOs mentioned them as a top pain point. The second milestone is where we validate the solution. In this stage, we usually already have a founding team of founders matched with these specific deities. In the third milestone the founders must show scale – repeatable use cases in a scalable market with the target sales bond. We are not limiting ourselves to realistic problems. From time to time we are building moonshot companies, high risk with a dramatic high gain. Duality, which is the world leader in secure data collaboration is one example of such moonshots.
Mike D’Agostino: [09:26]
Got it! Talk more about those areas. We’re not looking for any trade secrets here. But can you discuss any specific areas of the cybersecurity industry specifically that you’re particularly excited about right now?
Bobi Gilburd: [09:41]
You mentioned security; the areas that we are interested in as part of our ideation process are not and should not be a secret. They add value to the companies we build. It is dramatically more than the idea. It is the process, the validation, the market research and the company’s growth. Some areas that are top of our mind nowadays involves organization data fabrics in answering data analysts, allowing top executives as the CEO, the board to understand their organization data without having to depend on which specific data analysts provide the results and when. We’re also asking ourselves how AI, and specifically their hottest topic nowdays – generative AI – will change the security landscape, and what opportunities it will create. We know for sure that AI creates new risk and we believe that this is an opportunity when it comes to cybersecurity. So this is another area that we are exploring.
Mike D’Agostino: [10:47]
Very good. I’m sure that’s going to be a main topic of discussion in the next couple of years. You see how things start to converge because you mentioned there were three different areas that the company invests in cybersecurity, AI and fintech. Have you guys given any thought to any of the companies that you work with or invest in particularly within the cybersecurity and AI space? How those can start to come together? Where do you see AI playing a role in cybersecurity? Is it helping identify risk or something yet unknown?
Bobi Gilburd: [11:26]
It’s three vehicles. The first vehicle deals both of the cybersecurity and AI infrastructure. It is focused on the enterprise market. The second has to do with digital health and the third is a fintech. Regarding your question on AI, as I mentioned, AI creates both opportunities and challenges. On the one hand, data manipulation is becoming more affordable, allowing companies to focus more on the data and less on the infrastructure. Companies nowadays must have an added value, which is more than their ability to construct the model. Previously was enough. Nowadays, they should provide something in addition, because the model itself will be soon commodity, due to product that will be publicly available, Like OpenAI ChatGPT, etc. At Team8, we believe that the data is only useful with AI and in the long term the only way to conduct large-scale AI, and production level is by employing the power of the cloud. As a result, we believe that all of the data will gradually be migrated to the cloud. We don’t believe it is possible in long term to have a data strategy on-prem. However, with the data being moved to the cloud, so are the attackers, which creates new attack vectors. As I’ve mentioned, securing AI from various new attacks, poisoning evasion, model theft are only some examples that will definitely demand the solution to secure this process. This is one of the areas of interest. Of course, now nowadays, you can find AI for security. Our cloud protection is as AI as part of his engine, and of course, security for AI. You cannot differentiate. I previously mentioned Duality, they secure data collaboration. It doesn’t really matter whether this is data or cyber company. These lines, which were previously clear have nowadays blurred the ratio of the data infrastructure and AI into the cybersecurity area.
Mike D’Agostino: [13:55]
You also have to try to wade through all of the marketing speak. A lot of companies throw out the term AI, and it’s maybe a loose interpretation at best of what that actually means. Just a couple more questions here for you. Before we wrap up, I’m sure there are many but can you give us insight into a success story of a startup that Team8 either helped build from scratch or invest in and how have they grown over time?
Bobi Gilburd: [14:21]
I will divide my answer into two parts. As for proven success, clarity, and the second company that teammate has built is a great example. Claroty, which is nowadays the world leader when it comes to IoT security, bridges the industrial gap between an IT (information technology) and OT (operational technology). It was founded one year after Team8 started back in 2014-2015. As I’ve mentioned, it is world leader and is considered a unicorn in various aspects. But we are really proud on the way the thesis being the idea, starting the company, building it and taking part in its growth. Even nowadays, Amir, which is one of the partners in Team8, he was the founder of Claroty. We really proud of founders coming of companies that we built and joining Team8 and vice versa. But this was before I joined Team8. The more recent example is Gem, our cloud detection investigation company, which has created the large user base and the design partners’ base, and we expect it to be one of our next unicorn, even if it is not. It has been almost a year after we have started. This company was out of stealth a couple of months ago, and we’re really proud of the process that we will be able to make. Again due to the strict process that I’ve mentioned, into working with the company. I haven’t mentioned, but the young companies are with us in the same building. We see them every day, we eat with them, we meet with them, and their problem is our problem. Once a company is on Team8 portfolio, once we have this company’s logo on our wall, Team8 employees, company leaders will do everything in their power in order to make sure that this company succeeds. What a great business model. It is almost like you have your own literal incubator on site to allow all these companies to kind of network with each other and learn from each other and get the support that they need. Great business model there. This has been a great conversation. What advice do you have? What advice would you give to any entrepreneurs that are looking to build a cybersecurity startup and seek investment? Back when I was at Unity 8200, I thought this is all about technology. Now I know that I was a naive. If I should pick one, the most critical component in the company’s success is its founders’ resilience in the understanding of the market and its needs. The validation stage is crucial, because sometimes the hottest, most hyped topics are not necessarily those that will create revenues. Understanding the market and how to develop successful company with an infinite growth mindset is most important. This is most crucial, the team starting from the founders. Resiliency is the word.
Mike D’Agostino: [17:53]
Resilience. Better off starting there than seeking money. Get your act together first before you go to market. It was great to have you on; appreciate your insights. Again, we’ve been speaking with Bobi Gilbert, Team8’s chief innovation officer out of Israel. Look forward to meeting up and having you on again. Good luck, and we’ll catch you next time.
Bobi Gilburd: [18:20]
Thank you for hosting me.