News Column

Identifying the Enemy

May 2007, HISPANIC BUSINESS Magazine

Hildy Medina

Mario Nemorivosky
Mario Nemorivosky

Like many innovators-turned-entrepreneurs, Mario Nemirovsky prefers spending more time in the lab than the executive suite.

"I really look at entrepreneurship as a technology person," says Mr. Nemirovsky, co-founder and chief scientist of Milpitas, California-based ConSentry Networks. "I have been the CEO of many startups not by will, but by necessity."

No matter. The Argentine's technological innovations have earned him the respect of the venture capital world and a reputation as a major player in the semiconductor industry. He has started three high-tech companies that raised more than $80 million. Among Mr. Nemirovsky's significant innovations he holds 38 patents is a car engine computer he developed for General Motors in the late 1980s that is still being used today.

He has shifted his attention to information technology security. ConSentry, Mr. Nemirovsky's latest company, was founded in 2003 and specializes in developing network access control products. These NAC products manage a user's identity and access to a network the more that is known about a user, the theory goes, the more secure that network will be.

It's become big business. The identity management space is expected to grow to more than $8.5 billion globally by 2008, according to The Radicati Group, a research firm.

"Now the risk is not only from the outside, but you have to protect from the inside," Mr. Nemirovsky explains. "The security network access control is securing who is able to access the network. Our target is the local area network."

For example, an infected laptop used to get access to the company's network can inadvertently launch a virus. In addition, network access by contractors, visitors, or even some employees can be disastrous if the wrong users can tap sensitive data, such as intellectual property or financial reports.

CUSTOMERS CALLING

So far, ConSentry's products have paid off. The company counts Continental Airlines among its more than 100 customers. In February, ConSentry teamed with Alcatel-Lucent, the world's biggest maker of telecommunications equipment. ConSentry's LANShield controllers and switches, which start at $18,000 and $14,000 respectively, will function with Alcatel-Lucent infrastructure.

"The fact that we have a company like Alcatel to OEM [original equipment manufacture] our product is important," Mr. Nemirovsky says. "It's also a big validation of what we have."

For those innovators who double as entrepreneurs, validation is all the more rewarding. But it hasn't always been that way for Mr. Nemirovsky.

"I think all experiences are good. Even the failures are good, and I have a lot of those."

BACK TO SCHOOL

He got his start in engineering in Argentina, where he started a light-automation company, but left in 1981. He headed to the United States and earned a master's degree at the University of Kansas. In 1985, he began working at Delco Electronics, General Motors, and within a few years became chief architect for the design of a GM engine control.

While at GM, he juggled several other projects, including working at Motorola's semiconductor operation in Austin, Texas. He managed to fit in Ph.D. studies at the University of California at Santa Barbara. After earning his doctorate in 1990, he served as an adjunct professor at UCSB for seven years.

He was hired to work on Apple Computer's PowerPC briefly before heading to National Semiconductor Corp. After 16 months at the company, he decided to strike out on his own.

It was 1998, entrepreneurs and investors were hungrily scouting for the next big technological innovation. Mr. Nemirovsky wasn't known in the venture capital community but had won acclaim for innovations in the computer architecture world.

"I had research at UCSB and I was published quite a bit," Mr. Nemirovsky says. "I also had a lot of support from academia."

The company, Xtreme Logic, was created to develop a general-purpose processor that would be used to solve network problems related to the then-rapidly expanding Internet.

Mr. Nemirovsky raised $5 million in seed funding and $25 million in the second round. But by 2001, he left the company because of the direction in which it was headed.

"There was mismanagement by all people involved, including myself," he recalls. "Everyone had different expectations. I didn't have a lot of experience at the time and the people who invested didn't have time to educate me."

The company folded within a year.

By late 2001, Mr. Nemirovsky had started another technology company, Flowstorm, and secured nearly a $1 million in seed funding. By the following year, the startup was in need of another cash infusion. But in the aftermath of the Sept. 11 terrorist attacks, investor interest had dried up.

"It was bad timing," Mr. Nemirovsky recalls. "We were going after $12 million when 9/11 fell."

SURVIVAL MODE

While the companies he started no longer existed, the technology he had developed over the years continued to evolve. Mr. Nemirovsky also studied the needs and desires of his target customers.

In 2003, he and four others started Kayamba, which would later become ConSentry. By that time, Mr. Nemirovsky had assembled a team of engineers and managers who would take the company to the next level. One of those engineers is Rodolfo Milito, a fellow Argentine who worked at Bell Labs for 15 years.

"Mario called me one day and said, 'I have a $5 million check in my pocket. Do you want to come in for an interview?'" Mr. Milito recalls. "I liked what I saw and I've been with him ever since."

ConSentry, which employs 100 people, has raised $51 million from investors including Accel Partners, Sequoia Capital, and DAG Ventures. Plans for an IPO are in the company's future.

If there is one thing Mr. Nemirovsky has learned through his successes and failures is that having the right team of people is critical to a tech startup's success.

"The reality is the people who have money don't care about the idea; they care about the management team. In this country, people believe that if you have an outstanding team of people and you miss your first idea, the team will find another idea.

"But if you have an excellent idea and a team that can't accomplish things, then you may end up with a beautiful idea but not product."

Mr. Nemirovsky appears to have accomplished both.



Source: HISPANIC BUSINESS Magazine and Hispanicbusiness.com, Copyright (c) 2007 All Rights Reserved.


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