Some of us run businesses that are doing good things but not necessarily mission-critical businesses like the world would fall apart if it doesn’t work. I will say to my team, “It’s HR. Nobody is going to die.” I say that because it keeps my team’s perspective, my perspective, and our nerves in check. However, our guest doesn’t have that same luxury. People aren’t necessarily going to die if the technology fails but lives will be changed in a significant way if it doesn’t work the way it’s supposed to work.
Gene Fay, the CEO of ThreatX, is joining us to talk about how he gets his team of 50 people or more to believe as deeply about what they are doing as he does because one mistake can make a significant difference. ThreatX is a company that does this special work of cybersecurity inside APIs. If that’s a term you are not familiar with, don’t worry about it. It’s a complex piece of technology. It’s a middleman for how different software platforms talk to each other. If this middleman doesn’t do its job, then there could be threats from all sides.
ThreatX’s technology solves some of the biggest challenges in cybersecurity, preventing hacking and fraud. The challenge though, for Gene’s team is that they can’t afford to have even one weak link. How does he do it? In 2021, they were nominated as the Best Place to Work. That’s hard to do when you are also scaling a culture but the most important piece is making sure that everyone is giving it their all. That’s what we are going to talk about. Gene Fay, welcome to the show.
Thank you, Kendra. I appreciate that. Thank you for the awesome introduction. If you are looking for a job in sales, maybe you can come work for us. That’s better than some of my team can do in terms of introducing our company. I appreciate that.
Behind the scenes, I used to be a programmer. I’m still a geek at heart. Technology is still a thing that drives me. I love talking about technology but I like talking about people and their jobs even more.
I feel the same way. I’ve got a true passion for cybersecurity and for trying to help people find jobs. There’s an HR aspect to my mind as well.
You wouldn’t have this success if it didn’t work that way. Tell us. You have had a lot of success over the years. You are a serial entrepreneur. He took over this company years ago. Why this company now? What was it about?Suppose you get the opportunity to work in an office. Take advantage of that because developing relationships with your peers, being next to somebody, and learning the tactical function you can't get in Zoom is a massive opportunity. Click To Tweet
I’ve done five startups. I was thinking about doing another one coming off a company getting bought by private equity. I was talking with, at the time, my friend who eventually became our chief product officer. I was thinking about starting our company from scratch. They are getting some whiteboards and some initial Angel funding and working on an idea that would then build to a feature and then hopefully to a product and a company.
In the midst of that journey, a recruiting firm reached out to me and said, “We are doing this search for a CEO position for a company called ThreatX in Colorado.” I said, “That sounds interesting.” I met with the two cofounders and liked both of them. I dug into the technology and its positioning. I met a lot of the team and liked the rest of the team. I came to the conclusion with Tom and said, “We can go build some technology and share whiteboards for the next two years or we can take some great technology at the start of a company and help the two cofounders and the team accelerate the company.”
Ultimately, for us, it came down to that decision point. We got excited about ThreatX and joined. Our chief product officer left for some medical reasons. He’s doing fine but decided on his own that he didn’t want to do it anymore. We’ve got shy of 50 people. We are going to close our B round of funding and continue to grow the business. It has been a great choice. I love the company and the team. Our Net Promoter Score for our employees is 92. That’s an exciting number.
Let’s dive into this a little bit more because we work a lot with companies that are either VC-based or private equity-based. My experience has been that the leaders struggle with how they maintain culture after a big round of funding, especially because there’s usually a lot of pressure from the VCs to hire. There isn’t necessarily a process in place for hiring. You end up maybe with a big group of people that have this background but not necessarily the same drive. Talk to us. How did you do this? How do you get these rounds of funding and then grow so enthusiastically?
I think about it as a starting point of having a defined culture, which is a tough thing to do because cultures can be rather nebulous. We started pretty early on working with our marketing leader at the time to define a core set of ten tenants, which are on our website if you go to ThreatX.com. Go to the Company page. You can scroll down. We share them with the world. They talk a lot about what we think are the ten most important things of our culture. That’s a great starting point. You have to live to those values.
That’s what I always say to new employees and current employees, “As a CEO, if I’m not holding myself accountable to the values or if their peers aren’t holding themselves to these values, I don’t believe in radical candor because that’s rude but we should feel free to reinforce what the norms are.” You start with a foundation that is built of concrete, not sand. I’ve had the pleasure of working with a whole group of people here that have poured that foundation for us. We are at the point now where we do feel comfortable that we can go to 100 and add another 50 people. We can go to 200.
That core foundation is there. I always relate it back to how I’m old enough to remember a company called EMC, which is, unfortunately or fortunately, for some people, part of Dell. I joined the company when it was a multibillion-dollar company. The culture that Dick Egan and Roger Marino started when they started the company as a couple of people was reinforced when there were thousands of people in the company. They started with a very strong sales and engineering-led culture with some instilling values.
Some of those values were not things that I cared about, and I didn’t instill them in my future companies but they always reminded me that if you build a strong enough culture from the beginning, you can scale with it. Some people came into the EMC culture, hated it, and said, “It’s a cult I don’t want to belong to.” There were people like me who loved it. I spent five and a half years there. I left. I was enjoying a company that was acquired by EMC and went back for another two and a half years.
For founders or CEOs that are going to be forced to hire, whether it’s for funding or great growth, you have to instill that culture from the beginning because if the culture doesn’t exist or there are negative things in the culture, those things are going to be amplified. Especially as people get further away from the people that are championing, whether it’s the CEO, the leadership team or our culture committee. As you add people, it’s harder to reinforce those norms that you are looking for in your culture.
It’s interesting. We have had many of these conversations. Culture in values come up over and over. I came from IBM and Hewlett-Packard. It’s a similar background in terms of these big businesses. Hewlett-Packard had a phenomenal culture when I joined it. It filtered through the entire organization. It was amazing. I then went to IBM. I was like, “There’s a big difference between two cultures.”
When I opened up my business, I saw the same thing with the values. It’s interesting, though, that you and I had that experience but yet so many founders and entrepreneurs poo-poo that and think of it as this woo-woo thing. Maybe not so much with ThreatX since you took over but with other businesses, how did you establish your values?
I will use ThreatX as an example. I don’t think the cofounder would mind when I even say that he didn’t find this particular area of the business important for them. They were fighting for survival. They were going from funding. The idea of pouring concrete and thinking about culture was something they never had time to do. He said, “I’m glad you did that. I didn’t necessarily believe in the beginning but I’ve seen some massive benefits because of it.”
If you talk with our employees, that’s what they value about the company. It’s not necessarily their stock, which is becoming more worthwhile. It’s that feeling of belonging. They feel appreciated and are not afraid to show appreciation to each other. Startups and early-stage companies always start with euphoria crashing to despair through, eventually, reality. If you don’t have a team that feels appreciated during that rollercoaster ride, there’s not some underlying thing which is more than a paycheck or the potential value of the stock but it’s more innate to human nature.
That act of feeling a part of a team, going to battle, and winning and losing together are the things that ultimately decide. The argument is, “The best technology hardly ever went to the best company.” Some of the best companies have built some of the best cultures. There are always exceptions to the rule, and/or there are cultures that people have joined where they were super successful companies but those cultural norms didn’t fit their cultural norms.Define a core set of 10 tenets, and then you have to live by those values. That's a great starting point! Click To Tweet
That’s a piece of it but for me, when I’m a board advisor or a board member, I start to talk about this, especially with very technically-led early-stage companies. I think about the environment they want to create for their engineers and what are the things that motivate them when they are working for other people and how to instill those types of things early in.
If you instill some of those things that will evolve but with 5 people, it’s easier to get 25 people around the table. If you have no cultural norms, values or direction around that area, it’s that much more difficult. Lightning strikes, you have some phenomenal products, and nothing else matters. Equally, as true, you have the unbelievably best culture but you don’t have product market fit. You still fail. It’s no guarantee of success but it can help a company weather some pretty severe storms.
Let me make sure I heard you correctly. They were worth these values before. You came in and put them in. Is it safe?
There wasn’t anything written down. There wasn’t anything specific. Every group will create their level of culture but it wasn’t a conscious decision. When I came in, I cherry-picked some things that they were doing, brought things from my experience and said, “Here’s what we are. Here’s what I want us to become. Let’s get buy-in from the fourteen people that were here when I got in.” When new hires join, I’m trying to more and more take them through that because, in the beginning, it got instilled in them through osmosis, but now, we are getting a little bit bigger. I’ve got to say, “Here’s where the tenants are. Here’s what they mean. Here’s why they exist within our company.”
That gives me a lot of hope because my experience has been that if those aren’t established right at the beginning, it’s very hard to carry them through. The fact that you did that it’s helpful to me. It’s so important. It has become the number one thing that has made my culture what it is. It’s being clear on our values, visiting the values every year, revising what we need to, and then hiring, firing, managing, training, governing, promoting, and compensating against those values. That’s cool. I’m impressed by that. I don’t hear that often. Tell us what are some of your challenges with your team. What are you experiencing at 50 people that you didn’t have before?
It’s the communication layer. It’s more one-to-many than one-to-one. I was fourteen people when I got here. If we had something going on or I had something specific I wanted to get done, it was easier for me to call a person or call a mini-meeting. At 50, it’s not overwhelming but it’s another level of complexity. I can’t be assumptive because I told a couple of people that now the company knows that.
We have always used Monday for all-hands meetings to distribute information. We’ve got to continue to reinforce things even if they are said once in those meetings because we can’t assume a group this large gets it. That’s the other piece of it. The other piece is we are a remote company. Fifty percent of our employees are in Massachusetts. Twenty-five percent are in Colorado. Twenty-five percent is around the US. There’s one person in the UK. The ability to build an enforced culture is that much more difficult.
We have been doing all-hands meetings virtually, at least twice a year, getting everybody together and doing more social than PowerPoint slides and dog and pony show because we’ve got to build those fibers or connective tissue on more of a relationship-based. I always say slack is a great way to not like somebody. If you’ve had a couple of beers with them, a nice dinner with them, and got to know that they’ve got kids, and a life outside of work, then you have a new level of sympathy and empathy for that person.
That is so critical, especially when you go into a stressful situation when you don’t know somebody. If I don’t know my counterpart Neil very well, we are slacking back and forth. It’s intense. The things I say could be misinterpreted. If he has never met me in person, he doesn’t know anything about me as a person, and I don’t know anything about him as a person, it can go off the rails. Investing in those events when COVID has allowed has been super helpful in helping us to build and reinforce that culture.
We have seen that so much. Much of the work we have been doing is helping build that relationship between people and teams, especially when they have been more remote and then have grown a lot. It is more challenging but not impossible at all. It’s a shift in work. That’s great that you do that. I’m glad that you are spending the money to fly everyone to be together. I look at it like, “You are not paying for an office space anymore.” Reallocate the budget. Celebrate in style instead of having an office.
I haven’t gone to the extreme but some board members have encouraged me to get rid of the office and to 4, 5, or 6 meetings a year where you get everybody together. We are not there. We are going to renew our lease for another year but most of the team only comes in two days a week. Nobody is required to come to the office. It’s that type of environment. Having come from places, I had a company acquired by IBM. I spent a couple of years at IBM. Even the smaller companies that I have been a part of were traditionally centrally located for the mass bulk of people in an office environment.
That’s more difficult to enforce your culture. Having 3 daughters and 1 daughter that’s going into business, it’s going to be more difficult for her to build relationships. I was talking with a friend of mine. I worked for a company for a very short period like a couple of months. It wasn’t a fit for me. The second in charge of that company has been a dear friend of mine and has been one of my mentors for years.
If I were a Zoom employee who went in and out of there in a month, I would have never developed any relationship with him. It would have been a missed opportunity because there was a lot of knowledge transfer between the two of us that happened over the years. People sometimes think in this new world that everything is virtual and equal. They are different. There is a massive amount of benefits but they are lost opportunities, especially for young people.
If you get the opportunity to work in an office at least a couple of days a week, take advantage of it and develop relationships with your peers. Being next to somebody and learning the tactical function that you can’t get in Zoom is a massive opportunity. Equally, it’s building relationships with your boss and your boss’s boss. That’s nearly impossible to do in a Zoom of under two people, whereas when you are in an office, it’s a great opportunity to do that.You must instill the culture from the beginning because if the culture doesn't exist, those things will amplify as you add people. It's harder to reinforce those norms that you're looking for in your culture. Click To Tweet
I’ve had some interesting lessons I’ve learned through that as well through COVID because I’m good at reading people. I can usually pick up on some of their things pretty quickly, especially in a recruiting environment. That works well because it can quickly eliminate or move someone slower. I thought I was doing well with that even over Zoom. Now, I’m realizing, “I’ve got to make that final interview a face-to-face interview no matter what.” There are little things.
I can’t tell if you are looking me in the eye. We are looking at a camera. As a matter of fact, if I look you in the eye, I look down. It’s interesting that you don’t get to pick up on those things. I do agree with you. That’s good advice to still make time for that FaceTime with people. Tell us a little bit about what you were like as a younger CEO and Founder. What would be some of the things that you are most embarrassed about that you are not afraid to share in a setting?
As a younger executive, it’s a lot more emotional. I lead with emotion, which is my superpower but equally my kryptonite because there’s a whole group of people that react well to that, especially leading a sales organization and sometimes a marketing department. It doesn’t go so well when you are leading a bunch of introverts on the engineering side or even extroverts who were engineers but don’t lead with their hearts. It’s understanding the audience.
If it worked at three companies, it doesn’t mean it works at the fourth company. Early in my career, I did believe that. I’m helping myself to evolve into being more thoughtful and practical. In some ways, I’m still a dreamer. I’m more optimistic about this company and my personal career than I have ever been. That’s something that differentiates me from my younger peers.
That’s something that has always been instilled in me but it’s being more thoughtful and not thinking that I’m using my loud and booming voice as a way to motivate everybody is the only way to motivate somebody because sometimes it’s apt to say nothing. That could be equally as powerful and motivating to certain individuals. It has been an evolution in my work.
Two companies ago, in the company that we sold to IBM, I became the General Manager of the group. I used many of my sales techniques to lead a 200-plus-person organization. It went fine because people knew me for a long time but coming into ThreatX, I knew that wasn’t something I was going to be able to do. There were candid times that I did some stuff that I was embarrassed about. I’ve apologized to people that still don’t talk to me to this day because of things I yelled at them about or things like that.
It’s a journey. I won’t say I’m ever going to be self-actualized but I will try to move up Maslow’s hierarchy of leadership and start to think about that. I will still always be an emotional leader because I have to be genuine and who I am but equally, when I go into the red zone, I’m recognizing that and making at least a conscious decision that I’m going for it as opposed to that blind rage decision, “I felt good, but now, I’ve got to apologize to some people.”
One of the classes we teach is on Dignified Conversations. The reason I use that word as opposed to difficult is that coming from IBM, behind closed doors, you got beat up all the time but then there will be the occasional time when it would happen in the hallway. I remember feeling like, “You look like an idiot when you are doing that.” Everyone now thinks an executive beat up somebody or vice versa. Everybody needs to keep their dignity. What have you done then to help yourself grow through those things? Have you done education? What have been the books you read?
I read a management book. I’m blanking on the name of it in. Ultimately, it has been a part of my life for a long time. It’s running. I don’t meditate but I run a lot. I was working on some things. They weren’t going my way. I was having a call with a peer of mine. I said, “It’s probably best that we end the call here and pick it up tomorrow because I would feel better going for a 10 or a 13-mile run and revisiting this conversation where I know I’m going to be in a better position.” I also recognize that I’m good at 8:00 in the morning. At 6:30 or 7:00, though, I’m still working. I’m not always at my peak, especially when it comes to my patience and my ability to be more thoughtful in how I react to things.
I appreciate you at least being mindful of it. That’s excellent.
Step one, recognize the problem.
I interviewed someone. She said her mantra is to look at what she is contributing to the problem that she’s trying to solve. That’s a pretty profound way to look at problems and think about them. What’s next? What’s coming up for the future for you and the team?
It’s the funding if all goes well. It’s our next round of funding. We have been negotiating final negotiations, and wires should hit soon. It will not be mass hiring because this group doesn’t necessarily want me to do mass hiring but it will be working to start to build a business. We had an offsite. We are starting to build out our plans for the second half of 2022, revising the plans based on the funding, and starting to think about how much faster we can go. I’m excited about that and then my podcast, which is the eXecutive Security podcast.
I heard a couple of episodes.You should get everybody together and do more social than then because you've got to build those fibers, the connective tissue, on more of a relationship based. Click To Tweet
We have released a bunch of episodes. We are lining up a lot of great guests on that side. We are starting to think about how to take that program to the next level. That has been something that I have a real passion for, which gets the idea of combining cybersecurity and helping people find jobs. I get to do something I like on that side. My marketing team has been super supportive. They have been driving the heck out of it.
From a business perspective and at a minimum, maybe we will grow by 200% or 300% in spite of inflation worries, recession worries, lots of other macroeconomics, and the darning war. I feel so bad for the people in Ukraine. I’m blessed for where we are no matter what’s going on on the macro side of things. We are excited about what’s going to happen in the second half of 2022.
What do you foresee around the corner some challenges you are going to have with the team? What do you think about that?
I’m not short-term worried about it, not to say that there won’t be bumps in the road. There always are. I go back to the culture committee that we have set up, the NPS scores that we have been doing, and the conversations that I and the managers have been having with people. People are all super bullish. Even if we hiccup this quarter or next quarter, the people aspect of it is a thing that we collectively can control and not something that I’m losing sleep over. There are plenty of other things in the business that I lose sleep over but I have been blessed to work with a great group of people. I interviewed two great candidates that would be great adds. From a people’s perspective, I am blessed.
I’m so glad to hear that. That’s lovely. Let’s end on that amazing note. This was a great conversation. Thank you so much, Gene Fay, for your time. We wish you the best with this round of funding. I always say that a deal falls apart before it happens. Hopefully, that has already happened.
It has. We are feeling good. Thank you, Kendra, for your efforts to put it on this show. I hope your readers get a little bit of value from our conversation. Thank you very much for asking to be a part of it. I look forward to staying in touch.
That would be great. Thank you.
About Gene Fay
Gene Fay is CEO at ThreatX. He brings 30 years of leadership experience to this role; he previously served as COO at WhiteOps (now HUMAN), GM at Resilient Systems (acquired by IBM), and VP of Worldwide Sales and Alliances at Network Intelligence (acquired by EMC).
Gene’s passion for helping others build careers in security drove him to launch the eXecutive Security podcast where CISOs offer guidance for starting or growing careers. Gene holds an MBA and a BS from Northeastern University.